Customer Due Diligence (CDD)
Customer due diligence is the process a reporting entity uses to identify and verify who its customers are and to assess the money-laundering risk they present. Under Australia's Tranche 2 reforms, real estate professionals must perform it from 1 July 2026.
Customer due diligence (CDD) is the set of checks a reporting entity carries out to know who it is dealing with before — and while — it provides a designated service. It has two parts: initial CDD, where the business identifies and verifies the customer (and any beneficial owners) before the service is provided, and ongoing CDD, where it monitors the relationship and updates the records as circumstances change.
For real estate professionals under the Tranche 2 reforms, CDD from 1 July 2026 means collecting and verifying identity documents for buyers, sellers, and the people who control corporate or trust purchasers, and matching the level of checking to the assessed money-laundering risk of the transaction. Higher-risk situations — overseas parties, complex ownership structures, or cash-heavy deals — call for enhanced due diligence.
CDD is where most of a real estate agency’s new AML record-keeping originates. The identity evidence, beneficial-ownership records, and risk assessments gathered during CDD must be retained for seven years and produced if AUSTRAC audits the business, which is why a reliable, searchable record of each customer’s verification file matters as much as collecting it in the first place.
Primary source
AUSTRAC — Customer due diligence →Last reviewed 3 June 2026. Rates, thresholds, and deadlines change — always verify against the primary source before making decisions.
Related terms
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