When must a suspicious matter report be made?
When you suspect on reasonable grounds that information you have may be relevant to crime, that a customer or their agent is not who they claim to be, or that someone plans an ML/TF offence using a designated service.
It applies even if you do not go ahead with the service, and even if you cannot identify the offender. Each new suspicion needs its own report.
Remember
- Reasonable grounds, not certainty.
- You may report even if you refuse the work.
- Each new suspicion is a new report.
Facts and sources for this part
- AUSTRAC: you must submit an SMR if you suspect on reasonable grounds that information you have may be relevant to crime, a customer or their agent is not who they claim to be, or a person is planning an ML/TF offence using a designated service. [S11]
- AUSTRAC: the SMR duty "applies even if you don’t end up providing the designated service to your customer". [S11]
- AUSTRAC: "You must submit an SMR (through your AUSTRAC Online account) even if you can’t identify the offender or suspected victim." [S11]
- AUSTRAC: "You must submit an SMR to us each time you form a new suspicion on reasonable grounds." [S11]
How fast must it happen?
AUSTRAC says the report must reach it within 24 hours if the suspicion relates to terrorism financing, and within 3 business days after the day you formed the suspicion for other suspicions.
Reports go to AUSTRAC through AUSTRAC Online. Your job is to follow your program’s escalation steps at once, the same day, so the clock is not wasted.
Remember
- Terrorism financing: within 24 hours.
- Everything else: 3 business days.
- Escalate the same day.
Facts and sources for this part
- AUSTRAC: you must submit the SMR within 24 hours of forming the suspicion if it is related to terrorism financing, and 3 business days after the day you formed the suspicion for other suspicions. [S11]
- AUSTRAC: "Reasonable grounds is an objective standard. This means that a reasonable person in your position would form a suspicion based on the facts, circumstances, and information available." [S11]
What is tipping off?
Tipping off is telling someone information that could prejudice an investigation. That includes the fact that you made, or must make, a suspicious matter report.
It is a criminal offence. The maximum penalty is imprisonment for 2 years or 120 penalty units, or both. AUSTRAC says it applies to a reporting entity and to its officers, employees and agents.
Remember
- Never tell the customer, or anyone linked to them, that a report is or may be made.
- It applies to employees and agents, not only to owners.
Facts and sources for this part
- AUSTRAC: "Tipping off is a criminal offence. The maximum penalty for tipping off is imprisonment for 2 years or 120 penalty units, or both." [S12]
- AUSTRAC: "The tipping off offence applies whether you create, share or receive the information." [S12]
- AUSTRAC: the tipping off offence applies to a reporting entity and to "an officer, employee or agent of a reporting entity". [S12]
- AUSTRAC lists "information that establishes you submitted an SMR, or that a requirement to submit an SMR has been triggered" as protected by the tipping off offence. [S12]
- AUSTRAC: "It doesn’t matter if you know or think an investigation has started." [S12]
What do you say to the customer?
Keep the conversation normal. Do not say “I am reporting you”, do not hint that you are suspicious, and do not tell colleagues who have no need to know.
If you need more information, ask for it the way you ask every customer. If you keep serving a customer you have reported, enhanced customer due diligence applies, and your tipping-off duty applies with it.
Remember
- Behave as you always do.
- Share only with people who need to know.
Facts and sources for this part
What counts as structuring?
Structuring means splitting payments into amounts under $10,000 to avoid a threshold report. AUSTRAC gives it as an example of when to submit a suspicious matter report.
A customer who does it may be told no, but the suspicion still has to be escalated. The refusal does not end your duty.
Remember
- Several payments just under $10,000 can be a red flag.
- Escalate even if you turn the work down.
Facts and sources for this part
Check what you have learned
Three questions from the test, each explained. Tap an answer.
Question 1 of 3
Within what time must a suspicious matter report about terrorism financing be submitted?
Show the answer
Right answer: D, Within 24 hours of forming the suspicion. AUSTRAC says 24 hours of forming the suspicion if related to terrorism financing. [S11]
Question 2 of 3
You cannot work out who the offender is. Can you still submit an SMR?
Show the answer
Right answer: C, Yes; you must submit one even if you cannot identify the offender or suspected victim. AUSTRAC says you must submit an SMR even if you cannot identify the offender or suspected victim. [S11]
Question 3 of 3
What is the maximum penalty for tipping off?
Show the answer
Right answer: B, Imprisonment for 2 years or 120 penalty units, or both. AUSTRAC says the maximum is imprisonment for 2 years or 120 penalty units, or both. [S12]