AML/CTF Guide
Reporting

Suspicious matter reports (SMRs): when a suspicion forms, the 3-business-day deadline, red flags and tipping off

The suspicious matter report is the obligation that makes the rest of the regime worth having. It is also the one small firms worry about most: what counts as a suspicion, how fast you must act and what you can say to the client. This page answers those three questions and gives you the red flags for each Tranche 2 profession.

Updated · Checked against AUSTRAC guidance and the legislation

A desk calendar with one day marked with a small teal flag, next to an analogue desk clock.
In short

A suspicious matter report must be lodged with AUSTRAC within 3 business days after the day you form a suspicion on reasonable grounds that a matter may involve money laundering, terrorism financing, proceeds of crime, tax evasion or a customer who is not who they claim to be. If terrorism financing is suspected, the deadline is 24 hours. Where the information is covered by legal professional privilege the deadline is 5 business days. You do not need proof, you must not tip off the customer in a way that could prejudice an investigation, and a report made in good faith is protected.

Key points
  • The clock starts the day after the suspicion forms, counted in business days on the Sydney calendar.
  • Suspicion on reasonable grounds, not proof. Write down the moment it forms.
  • Terrorism financing: 24 hours. Legal professional privilege: 5 business days with AUSTRAC's privilege form.
  • After an SMR, the customer becomes high risk: enhanced due diligence and closer monitoring.
  • Tipping off is an offence when the disclosure could prejudice an investigation; discuss only with the compliance officer and AUSTRAC.
The four AUSTRAC reports and their deadlinesA table-style diagram of four reports: suspicious matter report within three business days, threshold transaction report within ten business days, international funds transfer instruction within ten business days, and the annual compliance report by 30 September each year.REPORTTRIGGERDEADLINESuspicious matter report (SMR)24 hours if terrorism financing · 5 business days with legal professional privilege

You form a suspicion on reasonable grounds

3 business daysThreshold transaction report (TTR)Transfers, cheques and cards do not count

Physical cash of AU$10,000 or more

10 business daysInternational funds transfer (IFTI)Mostly banks and remitters; your bank reports yours

You send or receive a transfer instruction across the border

10 business daysAnnual compliance reportFirst Tranche 2 report covers 2026–27, due 30 Sep 2027

Every financial year (1 July to 30 June)

By 30 September
Business days are counted from the day after the trigger, on the Sydney calendar, skipping weekends and public holidays. Use the calculator below for an exact date.

What a suspicion on reasonable grounds means

You do not need to know a crime has happened. You need facts that would lead a reasonable person in your position to suspect that a matter may involve money laundering, terrorism financing, the proceeds of crime, tax evasion, or that a customer is not who they say they are. Unexplained inconsistencies are usually the trigger: a stated purpose that does not fit the transaction, funds that arrive from a third party nobody mentioned, a client who resists ordinary identification. One red flag may be enough; often it is two or three together.

The deadlines, precisely

Use the calculator on this page for an exact date. The habit that keeps firms compliant is simple: write the suspicion down the day it forms, with the time.

  • Money laundering, proceeds of crime, tax evasion, identity: within 3 business days after the day the suspicion forms.
  • Terrorism financing: within 24 hours of forming the suspicion.
  • Information covered by legal professional privilege: within 5 business days, with the privilege form, under the 2024 reforms.
  • A business day is a day that is not a Saturday, Sunday or public holiday in the place concerned. The deadline ends at the end of the last business day.

Red flags for accountants and bookkeepers

  • Client wants you to hold or move money through your trust account for no clear business reason.
  • Company or trust structures with no commercial purpose, nominee directors, or frequent changes of control.
  • Funds for a business purchase arriving from an unrelated third party or from several accounts.
  • Reluctance to provide beneficial ownership information or identification for a director.

Red flags for real estate agents

  • Buyer not interested in price, inspection or condition; wants to settle fast.
  • Deposit paid by a third party, or from an overseas account unconnected to the buyer.
  • Buyer or seller is a company or trust that will not say who controls it.
  • Cash offered for a deposit, or several cash payments just under AU$10,000.
  • A property sold and resold quickly at a very different price.

Red flags for lawyers and conveyancers

  • Client wants to use your trust account to receive and pass on funds unrelated to the matter.
  • Source of funds inconsistent with the client's profile, or changing explanations.
  • Instructions coming from someone other than the client without a clear reason.
  • Entity structures across several jurisdictions for a simple domestic transaction.
  • Pressure to skip verification because the client is well known or in a hurry.

What goes in the report

AUSTRAC Online guides you through the form: the reporting entity, the customer and any other people involved, the designated service, the transaction or behaviour, the grounds for suspicion in your own words, and the documents you hold. Write the grounds plainly, as you would explain them to a colleague. A report is useful to AUSTRAC when it says what you saw and why it did not fit.

After you report

The customer is now high risk under your program: apply enhanced due diligence, confirm source of funds and wealth where you can, and monitor more closely. You are not obliged to stop acting, but your program should say who decides and how. Record the decision. If the customer has not completed initial due diligence, you must not provide the service until they do.

Tipping off

Since 31 March 2025 the offence is disclosing that an SMR has been made or is being considered, or information from which that could be inferred, where the disclosure could reasonably be expected to prejudice an investigation. The reform allows disclosures that are reasonable, for example to a professional adviser or within a reporting group, but the safe practice in a small firm is unchanged: discuss it only with your compliance officer, your lawyer if you need advice, and AUSTRAC.

Protection for good-faith reports

A report made in good faith is protected from civil, criminal and administrative liability and does not breach confidentiality or professional conduct rules. The reverse is also true: failing to report a matter you suspected is a contravention, and AUSTRAC's enforcement history shows it treats reporting failures seriously.

Interactive

AUSTRAC deadline calculator

Pick the report and the day the trigger happened. The clock starts the day after, on the Sydney calendar, skipping weekends and public holidays.

3 business days after the day the suspicion formed.

Lodge with AUSTRAC by14 Oct 20263 business days, skipping weekends and New South Wales and national public holidays. Due by 11:59 pm Sydney time.

A tool for planning, not legal advice. The obligation runs from when the suspicion forms (or the cash is received), so record that moment in your file.

How to lodge a suspicious matter report

  1. 1
    Record the suspicion

    Note the date, time, who formed it and the facts. This is the start of the deadline and the first record an assessor will ask for.

  2. 2
    Escalate to the compliance officer

    Staff do not lodge reports; they tell the officer, who decides whether a suspicion on reasonable grounds exists.

  3. 3
    Gather the matter

    Customer details, the service, the transaction or behaviour, why it is suspicious, and the documents you hold.

  4. 4
    Lodge through AUSTRAC Online

    Use the SMR form within 3 business days (24 hours for terrorism financing). Keep the receipt.

  5. 5
    Reassess the customer

    Raise the risk rating to high, apply enhanced due diligence and decide under your program whether to continue acting.

  6. 6
    File it for seven years

    The report, the reasoning and the evidence stay in the record, separate from anything the customer can see.

Questions people ask

How long do I have to lodge an SMR?
Three business days after the day the suspicion formed; 24 hours if terrorism financing is suspected; five business days where legal professional privilege applies.
Do I need evidence before reporting?
No. A suspicion on reasonable grounds is enough. Reporting is what gives AUSTRAC the chance to find the evidence.
Can I tell the client I am reporting them?
No, where that could prejudice an investigation, which in practice is almost always. Discuss the matter only with your compliance officer and AUSTRAC.
Do I have to stop acting for the client?
Not automatically. You must report, raise their risk and apply enhanced due diligence. Whether to continue is a decision under your program, and should be recorded.
What if I report and I was wrong?
A good-faith report is protected even if the matter turns out to be innocent. The law asks for suspicion, not certainty.

Read next

Sources

Official pages this page was checked against. The date is when we captured the page; the publisher may have updated it since.

General information about Australian AML/CTF law, not legal advice. The Act, the Rules and AUSTRAC's guidance are the primary sources; check them before you rely on a date or a figure.

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Suspicious matter reports: when, how and the 3-day rule · AML/CTF Guide