Myths, Vendors & What AUSTRAC Won't Do to You
AUSTRAC won't fine you for honest mistakes. Your SMR can't be used in court. And that vendor claiming "AUSTRAC endorsement"? They're lying. Here's the myth-busting session every practitioner needs.
The AML/CTF regime is new for Tranche 2 professionals, and with anything new comes fear, misinformation, and people trying to sell you things. AUSTRAC's CEO Brendan Thomas has addressed the most common myths directly — across multiple public events. Here's what he actually said.
Myth #1: "I'll get fined $19,000 for making a mistake"
There's a $19,000 penalty circulating in the industry. Practitioners are terrified they'll be fined for not filling in the right form or missing a report.
AUSTRAC's CEO has said this repeatedly: "We don't penalise businesses who are trying their best to comply with laws. We never have and we won't in this instance." You can verify this yourself — AUSTRAC's website lists every enforcement action they've taken. You won't find a single small business punished for honest mistakes. Penalties are reserved for entities that willfully ignore their obligations or deliberately turn a blind eye to crime.
Myth #2: "I need to kick suspicious clients out of my business"
If you suspect a client of money laundering, you need to stop the transaction immediately and refuse to act.
You do not need to stop transactions to comply with AML obligations. Banks report hundreds of thousands of suspicious transactions every year, and most of those transactions continue. If it's in your interest to complete the transaction, complete it — just report the suspicion to AUSTRAC. Stopping the transaction might actually tip off the client, which is a separate offence.
The exception for lawyers: the Law Council's position is that once you've filed an SMR, you can no longer act in the client's best interests, so you should cease acting — but this is an ethical obligation, not an AML one.
Myth #3: "If I file an SMR, the client will find out and I'll be at risk"
Particularly in regional areas where "everyone knows everyone," practitioners worry that filing a suspicious matter report will lead to retaliation.
Your SMR is protected by law from being made public. It cannot be used in court as evidence. The person you reported will never see the report. Police must build their own entirely separate case. AUSTRAC's CEO confirmed: there has never been a threat to anyone who submitted an SMR in Australia since the regime began in 2006 — and colleagues globally report the same. You will not be called as a witness. Your name will never appear in any charges or proceedings.
Myth #4: "I need to collect extremely detailed personal information from every client"
Every client needs to provide bank statements, proof of source of funds, and extensive documentation before you can act.
Information requirements flow with risk. Most clients are low-risk, regular people doing regular transactions. For them, you need a source of identification (driver's licence, passport) and a quick sanctions check. Source-of-wealth and source-of-funds checks are only needed when you develop a suspicion. If you're already doing verification of identity (VOI), you're roughly 80% there already.
The vendor warning
AUSTRAC's CEO issued a direct warning about AML vendors:
There are a lot of people selling AML solutions — both in Australia and globally. There's nothing wrong with purchasing external services, but AUSTRAC wants you to be wary of three things:
The starter kits: a world first
AUSTRAC's starter kits are unlike anything produced in any other country. Neil Jeans from Grant Thornton, who has over 40 years of AML experience, described them as "some of the most practical, sensible, logical, and easy-to-follow programs I've ever seen."
Other countries that implemented similar regimes — including the UK and New Zealand — told AUSTRAC that small businesses wished they'd been given a program to start with. Australia learned from that feedback. The kits were developed in partnership with small businesses and went through multiple rounds of consultation and user testing.
Neil Jeans put it in perspective: the alternative to using the starter kits is reading 350 pages of legislation, 180 pages of rules, and 340 pages of guidance — and working out what applies to you. The starter kits have done that work for you. For most small businesses, they're the least-cost, least-effort path to compliance.
What AUSTRAC actually expects from you
AUSTRAC's call centre is available on extended hours (until 7pm) specifically because they understand small business owners often deal with compliance after hours. Call them with questions — that's what they're there for.
This article draws on public statements by AUSTRAC's CEO Brendan Thomas and industry experts across multiple events. Key sources:
Disclaimer: This article is published by GetPost Labs Pty Ltd, a technology company building compliance software. All content is for educational purposes only and does not constitute legal, financial, or compliance advice. While we make every effort to ensure accuracy, this article may contain errors or omissions. Always refer to the authoritative text on legislation.gov.au and seek professional advice for your specific circumstances. If you spot an error or have a suggestion, please reach out to sumit@getpostlabs.io.