Does one red flag mean a crime?
No. AUSTRAC says one indicator on its own may not suggest suspicious activity. Several together, or one that cannot be explained, is a reason to look harder.
When you are unsure, the move is more monitoring and examination, including enhanced customer due diligence. It is not a quiet word with the customer and it is not ignoring it.
Remember
- One flag is a prompt, not proof.
- Unsure? Look harder and escalate. Do not guess.
Facts and sources for this part
- AUSTRAC: "On their own, one of these indicators may not suggest suspicious activity." If you are unsure whether there are reasonable grounds, "you should conduct further monitoring and examination, including applying enhanced customer due diligence measures". [S37]
What should real estate staff watch for?
AUSTRAC’s national risk assessment rates the sector as high risk, and says real estate professionals are often the first contact point for criminals trying to launder money.
Red flags include a buyer who avoids face-to-face meetings, pays part of the price in cash to the agent, buys in the name of a third party, or asks for a sudden change of ownership close to settlement. Another is a complex company or trust structure, or sale proceeds sent to an unrelated third party.
Remember
- Cash paid to the agent.
- Buying through a third party or a complex structure.
- Sudden ownership changes near settlement.
Facts and sources for this part
- AUSTRAC: real estate businesses are likely to provide designated services if they work as a buyer’s or seller’s agent, or are a developer selling house and land packages, apartments off the plan or blocks of land without independent agents. [S8]
- AUSTRAC: its national risk assessment "found the real estate sector poses a high money laundering risk in Australia". [S37]
- AUSTRAC: "Real estate professionals are often the first contact point for criminals trying to launder money." [S37]
- AUSTRAC real estate red flags: a customer who "avoids face-to-face meetings" or is "obstructive or secretive in their dealings with you". [S37]
- AUSTRAC real estate red flag: a customer who "makes a full or partial payment of the property purchase price in cash to the real estate agent". [S37]
- AUSTRAC real estate red flag: a customer who buys "in the name of a third party, relative or a minor with no legal or economic reason". [S37]
- AUSTRAC real estate red flag: a customer who "asks for a sudden change of ownership without a legitimate reason, especially close to settlement". [S37]
- AUSTRAC real estate red flags: a customer who uses "a corporate or legal entity with a complex structure or financing, such as a shell company or trust" or who cannot explain the source of a large amount of cash. [S37]
- AUSTRAC real estate red flag: a customer who "directs sale proceeds to an unrelated third party". [S37]
What should accountants watch for?
AUSTRAC warns that professional services are an easy target for illicit activity. It lists a client who does not seem to understand the business sector they say they work in, who ends the relationship when you ask for more information, or who appears to follow instructions from third parties.
Whether your work counts as a designated service depends on the facts. AUSTRAC says obligations apply from 1 July 2026 if you provide a designated service in table 6.
Remember
- A client who cannot explain their own business.
- A client who walks away when asked for more information.
- Whether a task is regulated depends on the facts.
Facts and sources for this part
- AUSTRAC: "AML/CTF obligations apply if you provide a designated service in table 6 from 1 July 2026." Whether your work is such a service "depends on the facts of each case". [S9]
- AUSTRAC: for lawyers, accountants, conveyancers, insolvency practitioners, financial advisers or professional services there is a separate guide on the designated services they provide. [S7]
- AUSTRAC accountant red flags: a client who "doesn’t seem to understand the business sector they’re operating in", "ends the relationship after you ask for more information" or "appears to be following instructions of third parties". [S38]
- AUSTRAC: "Your professional services are an easy target for illicit activities." [S38]
What about legal and conveyancing work?
AUSTRAC lists clients who try to avoid know-your-customer steps, or who have an unusual level of knowledge about AML/CTF requirements. Lawyers and conveyancers who help plan or carry out a property transfer may be regulated under different designated services from agents.
A transfer with no payment can still count. AUSTRAC’s example is a conveyancer who helps a parent transfer the family home to a child.
Remember
- Clients dodging identity steps.
- A gift transfer of property can still be a designated service.
Facts and sources for this part
- AUSTRAC legal-sector red flags: a client who "tries to avoid know your customer (KYC) processes" or "has an unusual level of knowledge about AML/CTF requirements". [S39]
- AUSTRAC: lawyers and conveyancers who help plan or execute the sale, purchase or transfer of real estate "may be regulated under different designated services" from agents. [S8]
- AUSTRAC: a conveyancer who helps a parent transfer the family home to a child without payment "will provide a designated service". [S8]
What about dealers in precious stones and metals?
The new dealer services cover buying or selling precious metals, stones and products for $10,000 or more in cash or virtual assets. Below that threshold the service is not covered, but staff still need to recognise structuring.
Red flags include paying cash for precious items, bringing a third party into the deal, wanting unusual anonymity, or quickly reselling the item to the dealer.
Remember
- The designated service starts at $10,000 in cash or virtual assets.
- Third parties, anonymity and quick resales are warning signs.
Facts and sources for this part
- AUSTRAC: the new dealer services cover buying or selling precious metals, stones and products "for $10,000 or more in physical currency" (cash, in Australian or foreign currency) "or virtual assets". [S10]
- AUSTRAC dealer red flags: a customer who "uses cash to buy precious stones, metals or other precious products", "uses or includes a third party in transactions" or "quickly sells products or re-sells to the dealer". [S40]
- AUSTRAC dealer red flag: a customer who "seeks anonymity to a high or unusual degree". [S40]
Check what you have learned
Three questions from the test, each explained. Tap an answer.
Question 1 of 3
You are unsure whether there are reasonable grounds for suspicion. What does AUSTRAC suggest?
Show the answer
Right answer: C, Do further monitoring and examination, including enhanced customer due diligence. AUSTRAC says to conduct further monitoring and examination, including applying enhanced customer due diligence measures. [S37]
Question 2 of 3
A buyer offers to pay part of the purchase price in cash to the agent. What is this?
Show the answer
Right answer: B, A red flag listed by AUSTRAC for real estate. AUSTRAC lists paying all or part of the price in cash to the real estate agent as a red flag. [S37]
Question 3 of 3
A buyer asks for a sudden change of ownership close to settlement with no legitimate reason. What does AUSTRAC list this as?
Show the answer
Right answer: A, A red flag. AUSTRAC lists a sudden change of ownership without a legitimate reason, especially close to settlement, as a red flag. [S37]