Suspicious Matter Reporting: What AUSTRAC Expects
The recording of AUSTRAC's webinar on suspicious matter reporting and digital currency exchange provider information.
Note: This webinar was published in August 2018. The core SMR obligations remain current. However, the tipping off offence was updated on 31 March 2025. This article also draws on SMR content from the AUSTRAC Real Estate Town Hall (November 2025) and Remittance Sector Forum (July 2025) for the most current guidance. Always refer to austrac.gov.au for the latest.
When must you submit an SMR?
You must submit an SMR if you or anyone in your business suspects on reasonable grounds that:
A customer or their agent is not who they claim to be
The designated service involves terrorism financing
The designated service involves money laundering or tax evasion
The designated service involves proceeds of crime or an offence against Commonwealth, State, or Territory law
24 hours
If suspicion relates to terrorism financing
3 business days
For all other matters
There is no dollar threshold for SMRs. You can submit an SMR even when no transaction has taken place — for example, if a customer enquires about a service but does not proceed, and you find the enquiry suspicious.
What does "reasonable grounds" mean?
Reasonable grounds means that, after considering all of the information and circumstances available, a reasonable person would believe there is a relevant suspicion and an SMR should be submitted.
You are not expected to prove wrongdoing. You are not a police officer. You report the suspicion — AUSTRAC and law enforcement take it from there.
"If you have a gut reaction to something, just sit with that gut reaction for a little period of time and think about what is it about this situation that is causing me concern."
— Katie Miller, Deputy CEO AUSTRAC, Real Estate Town Hall 2025
Tipping off — a criminal offence
You must NOT
- ✗Tell the customer you have filed or plan to file an SMR
- ✗Disclose that an SMR has been triggered or is under consideration
- ✗Tell the customer the business relationship is ending because of an SMR
The updated rule (31 March 2025)
The tipping off offence now focuses on whether disclosing information would or could reasonably be expected to prejudice an investigation. This shifts the focus from compliance to risk. Continue providing services normally after filing an SMR.
What AUSTRAC does with your SMRs
Intelligence analysis
AUSTRAC analyses reports using sophisticated modelling and cross-references them with reports from other entities and its own intelligence holdings.
Building pictures of crime
SMRs help identify patterns of criminal activity, link criminals not previously known to be connected, and corroborate intelligence from other sources.
Shared with partners
Intelligence is shared with law enforcement and national security partners in Australia and overseas to investigate and fight crime.
SMRs are not admissible as evidence in court. Submitting an SMR does not directly expose you or your customer to legal consequences — it triggers an investigation by agencies better placed to assess the situation.
What AUSTRAC says about SMR quality
Across its 2025 Reporting Entity Forum sessions, AUSTRAC repeatedly noted that SMR reporting levels across multiple sectors are low, and many SMRs submitted are of low quality.
Common issues AUSTRAC identified
- •Limited understanding of what triggers an SMR
- •Inadequate processes to identify and investigate suspicious activity
- •SMRs submitted only after external triggers (adverse media, law enforcement) rather than from internal monitoring
- •Grounds for suspicion not clearly stated upfront in the report
"Submitting poor quality reports, or failing to submit reports, is a breach of your compliance obligations. It also reduces AUSTRAC and law enforcement's ability to detect, deter, and disrupt criminal activity."
— AUSTRAC Remittance Sector Forum, July 2025
Disclaimer: Published by GetPost Labs Pty Ltd for educational purposes only. Not legal, financial, or compliance advice. This article draws on the AUSTRAC SMR and Digital Currency Exchange Provider Webinar (7 August 2018), the AUSTRAC Real Estate Town Hall (November 2025), and the Remittance Sector Forum (July 2025). Refer to austrac.gov.au for the latest guidance. Errors: sumit@getpostlabs.io