Suspicious matter reports: when, how fast, and what not to say

The short version

If, at any point, you suspect on reasonable grounds that a client or would-be client (or their agent) is not who they say they are, or that information you hold may be relevant to a crime, tax evasion, money laundering or terrorism financing, you must report it to AUSTRAC. The deadline is usually 3 business days, or 24 hours for terrorism financing.¹ You must not tell the client or anyone else in a way that could prejudice an investigation.²

1. Notice

   Staff escalate unusual transactions and behaviour to the compliance officer. s 30(2)

2. Decide promptly

   Review the material in time, and decide as soon as practicable whether there are reasonable grounds to suspect. Rules 5-12

3. Report in time

   3 business days, 5 where part of the information is someone else's privileged material, 24 hours for terrorism financing. s 41(2)

4. Say nothing that tips off

   Keep the report and the suspicion confidential. s 123 Rules 5-13

5. Follow through

   If you keep acting, apply enhanced CDD. Keep the records. s 32(b)

When the obligation arises

The obligation arises when you start or propose to provide a designated service to a person, when they ask you for one of your usual services, or when they ask whether you would provide one, and you suspect on reasonable grounds, then or later, that:³

• the person, or their agent, is not who they claim to be;
• information you hold may be relevant to investigating or prosecuting tax evasion, or an offence against a Commonwealth, State or Territory law, or may help enforce proceeds of crime laws;
• the service is preparatory to, or information you hold may be relevant to, a terrorism financing offence;
• the service is preparatory to, or information you hold may be relevant to, a money laundering offence.

The obligation does not depend on you going ahead. AUSTRAC says it applies even if you do not end up providing the service, because criminals may "test the market".⁴ AUSTRAC also says you must report even if you cannot identify the offender or the victim, and that each new suspicion needs its own report, with the reference numbers of earlier related reports.⁴

Reasonable grounds. AUSTRAC describes this as an objective standard: whether a reasonable person in your position, with the information you had or could reasonably be expected to have, would form the suspicion.⁴ Your policies must provide for timely review of material that may need reporting, and for deciding as soon as practicable whether you hold the suspicion.⁵

Real estate agents. Where the other side of a sale will not cooperate with your due diligence, the refusal must be taken into account in deciding whether you have reasonable grounds for suspicion.⁶ See our customer due diligence guide.

The three clocks

A business day is any day other than a Saturday, a Sunday or a public or bank holiday in the place concerned.⁷ The 5-day clock does not apply to a terrorism financing suspicion. The duty to report within these times is a civil penalty provision.⁸

Legal professional privilege

Privilege matters most to law firms, but it can arise in any practice that holds privileged material.

• All of it privileged. You may refuse to report if you reasonably believe that all of the information forming the grounds of your suspicion is privileged. s 41(2A)
• Some of it privileged. If you reasonably believe some, but not all, of the information the report must contain is privileged, the report must be accompanied by an LPP form for that information. Report within the time that applies. s 41(3)(aa)
• What an LPP form is. A written notice in the approved form that says on what basis the information is privileged. s 5
• What privilege includes. Since 1 July 2026 the Act says legal professional privilege includes privilege under Division 1 of Part 3.10 of the Evidence Act 1995. Amendment Act Sch 4

The Act has the same LPP-form mechanism for threshold transaction reports, AUSTRAC's program documentation requests, further-information notices, authorised officer notices, and notices asking whether you provide designated services in Australia.⁹ Our law firm guide covers privilege in more detail.

What the report contains

The report must be in AUSTRAC's approved form, contain the information the Rules require and state the grounds for your suspicion.¹⁰ AUSTRAC asks for reports through AUSTRAC Online, and says a business that enrolled after 30 March 2026 must use its new report form from 1 July 2026.⁴

AUSTRAC expects you to explain the suspicion in a way that shows a reasonable person would likely reach the same conclusion.⁴ In practice, write the grounds so that someone reading only the report can follow them.

After the report

• If you keep acting, enhanced CDD applies to that client. s 32(b)
• If the client is a pre-commencement customer, initial CDD under s 28(1) applies to them from the time the reporting obligation arises. s 36(4)
• You may be asked for more. The AUSTRAC CEO, the police or another listed agency may, by written notice, require further information or documents about the report. If you reasonably believe something asked for is privileged, you give an LPP form. s 49
• Threshold transactions are separate. A transaction involving A$10,000 or more in physical currency is reported within 10 business days, whether or not you suspect anything. s 43(2) s 5

Tipping off

It is an offence for a reporting entity, or its officers, employees or agents (among others), to disclose certain information to another person, other than an AUSTRAC entrusted person, where the disclosure would or could reasonably be expected to prejudice an investigation of an offence or under proceeds of crime laws.² The information covered is:¹¹

• that a report has been given or is required;
• the report itself, a copy, or any document setting out what it contains (including that a suspicion was formed);
• that you have been required, by a notice under s 49 or s 49B, to give information or documents, or that you have done so.

It does not matter whether an investigation has started. The maximum penalty is imprisonment for 2 years or 120 penalty units, or both.²

The exception does not cover real estate agents or conveyancers who are neither legal practitioners nor qualified accountants. The Act lets the Rules add other persons; the AML/CTF Rules 2025, as we read them on 25 September 2026, do not. Separately, the Act permits some sharing with another reporting entity to detect, deter or disrupt serious crime, but only under conditions set by regulations, which this guide does not cover.¹²

Your policies must include safeguards against tipping off, including keeping information confidential within the business.¹³ AUSTRAC's tipping off page gives examples of controls. AUSTRAC links open in a new window; AUSTRAC has not reviewed or endorsed this guide.

What to set up now

Our suggestions, drawn from the obligations above and AUSTRAC's suspicious matter reports guidance:⁴

• one named person (usually the compliance officer) who decides and lodges, with a back-up for leave;
• a short internal escalation form staff can complete the same day, and a register of every escalation, including those you decide not to report, with the reason;
• the business-day rule written into the procedure, with the 24-hour rule highlighted;
• AUSTRAC Online access for the decision maker set up before you need it;
• a script for staff on what to say, and not say, to a client while a matter is under review.

Where we fit

We do not decide or lodge reports for you, and we do not act as your compliance officer. AUSTRAC's program starter kits are free. Our kit builds on them. Every edition includes an unusual activity escalation form and register and an SMR and TTR procedure and register. The accountants and legal practice editions add a tipping-off procedure covering the s 123(4) exception, and the legal practice edition also adds an LPP handling procedure and LPP form register. Our set-up service tailors them to your practice.

• Your sector: accounting practices, real estate agencies, conveyancers and legal practices.
• More guides: the guides page and every source on our sources page.

Independent. Not affiliated with, or endorsed by, AUSTRAC or the Australian Government.