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Suspicious Matter Reporting

Recognising red flags and reporting suspicious matters to AUSTRAC

What is a Suspicious Matter Report (SMR)?

A Suspicious Matter Report (SMR) is a report you must submit to AUSTRAC when you form a suspicion on reasonable grounds that a transaction, or a customer, may be involved in money laundering, terrorism financing, or other serious crimes.

The Suspicion Test

Suspicion is more than speculation but less than proof. It's a feeling or belief based on reasonable grounds that something is not right. You don't need to prove the crime — if you have a genuine suspicion based on the facts and circumstances, you must report.

Common Red Flags

  • Customer wants to pay large amounts in cash ($10k+)
  • Customer is secretive or evasive about identity or source of funds
  • Customer uses multiple unrelated third parties to fund a transaction
  • Transaction has no clear economic purpose or makes no sense
  • Customer rushes a transaction and is unconcerned about price
  • Frequent buying and selling with no obvious reason
  • Assets held through complex offshore structures
  • Customer asks you not to report or file required documents
  • Customer offers bribes or unusual commissions
  • Transaction value significantly overstated or understated

SMR Reporting Timeframes

You must submit an SMR as soon as practicable after forming the suspicion, but no later than: 24 hours for matters involving terrorism financing, or 3 business days for money laundering or other offences.

The Tipping Off Offence

It is a criminal offence to disclose to anyone (including the customer) that you have submitted an SMR, or that AUSTRAC or law enforcement is investigating. This is called 'tipping off'. Penalties include up to 2 years imprisonment. You can discuss SMRs with your compliance officer, legal advisors, or AUSTRAC.

Protected Disclosure

You cannot be sued for submitting an SMR in good faith, even if the suspicion turns out to be wrong. The law protects you from civil or criminal liability. When in doubt, report.

Threshold Transaction Reports (TTRs)

A Threshold Transaction Report (TTR) must be submitted for any transaction involving physical currency (cash) of $10,000 AUD or more. This applies even if the transaction is split into smaller amounts (structuring). TTRs are separate from SMRs — you may need to file both.

What to Include in an SMR

  • Details of the suspicious matter and why you are suspicious
  • Customer information (name, DOB, address, ID documents)
  • Transaction details (amount, date, parties involved)
  • Any supporting documents or evidence
  • Details of any other persons involved

How to File an SMR

SMRs are submitted electronically through AUSTRAC Online. You must register with AUSTRAC first and appoint a compliance officer who can submit reports on your behalf. Keep a copy of all SMRs and supporting documents for 7 years.

Example Scenario

A buyer wants to purchase an $850,000 property. They are vague about their occupation, offer to pay $500,000 in cash, and want to settle within a week. They say 'don't worry about the paperwork'. This is highly suspicious — you should refuse service and file an SMR immediately.

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