Are EFT payments and PEXA settlements covered by the TTR threshold?

No. A threshold transaction involves the transfer of physical currency, meaning coin and printed money (s 5). Bank transfers, including electronic settlement payments and EFT deposits to a trust account, are not physical currency. In AUSTRAC's real estate example, a cash deposit is a threshold transaction and the settlement balance paid by electronic transfer needs no report.

What if a single matter is both suspicious and a cash transaction over $10,000?

File both. The SMR deadline runs from when you form the suspicion: 24 hours for terrorism financing, otherwise 3 business days. The TTR deadline is 10 business days after the day the transaction takes place.

It is an offence for a reporting entity, or its officers, employees or agents, to disclose certain information where the disclosure would or could reasonably be expected to prejudice an investigation (s 123(1)). The information covered includes that an SMR has been given or is required, and the contents of one (s 123(2)). It does not matter whether an investigation has started (s 123(3)). The maximum penalty is 2 years' imprisonment or 120 penalty units, or both.

Do we need to document SMRs we decide not to file?

No rule expressly requires it. AUSTRAC's guidance says you may choose to record your reasons when you decide there are no reasonable grounds for suspicion. If you are still assessing a suspicion, AUSTRAC expects written records of the steps you take. Your policies must provide for timely review and a decision as soon as practicable (Rule 5-12), and you must keep records showing you followed them (s 116). A short dated note is the simplest evidence.

SMRs and TTRs

Suspicious matter reports and threshold transaction reports — the deadlines, the triggers, the tipping-off rule, and how the two overlap in real estate.

In short

A suspicious matter report is due within 24 hours of forming a terrorism-financing suspicion and within 3 business days of forming any other suspicion (AML/CTF Act s 41(2)). The 3 days becomes 5 business days where some, but not all, of the information may be covered by someone else's legal professional privilege. A threshold transaction report is due within 10 business days after any transaction involving $10,000 or more in physical currency (ss 5, 43). Tipping off is a criminal offence with a maximum penalty of 2 years' imprisonment, 120 penalty units, or both (s 123).

Two reports do most of the work under the AML/CTF Act 2006 (Cth): the suspicious matter report (SMR) and the threshold transaction report (TTR). Alongside them sits a criminal offence, tipping off, which limits what you can say about an SMR.

When an SMR obligation arises (s 41(1)). The obligation can arise at three points. You start, or propose, to provide a designated service to a person. Or the person asks for, or asks about, a service you ordinarily provide. It applies even if you never end up acting. You must report if, at that time or later, you suspect on reasonable grounds that:

the person, or an agent dealing with you for them, is not who they claim to be;
information you hold may be relevant to investigating or prosecuting tax evasion or an offence against a Commonwealth, state or territory law, or may assist proceeds of crime enforcement;
the service is preparatory to a terrorism financing or money laundering offence, or information you hold may be relevant to investigating or prosecuting one.

"Reasonable grounds" is objective. AUSTRAC's guidance asks whether a reasonable person in your position, with the same information, would form the suspicion. AUSTRAC's common indicators include:

a customer who wants to be anonymous;
one who appears to be acting for an undisclosed third party;
one who is reluctant to provide identification;
payments split into amounts under $10,000 with no apparent purpose;
transactions that don't fit the customer's profile.

In a sale, that might be an unexplained third party paying the deposit, or a buyer whose stated occupation can't account for the price.

SMR deadlines (s 41(2)).

Terrorism financing: 24 hours after you form the suspicion.
All other suspicions: 3 business days after the day you form the suspicion.
5 business days applies to non-terrorism suspicions only, and only where you reasonably believe some, but not all, of the required information may be privileged. The privilege must belong to someone other than you.

If all the information behind your suspicion is privileged, you may refuse to give the report (s 41(2A)).

Lodge SMRs through AUSTRAC Online. The report must include a statement of the grounds for your suspicion (s 41(3)(c)). If you keep acting for the customer, enhanced CDD applies (s 32(b)). AUSTRAC's guidance is clear that you must not hold back the SMR to finish enhanced CDD first.

TTRs (ss 5, 43). A threshold transaction is a transfer of physical currency, meaning coin and printed money, of $10,000 or more (s 5). Foreign currency is converted at the applicable exchange rate (s 18). You must report it within 10 business days after the day the transaction takes place (s 43(2)). AUSTRAC's worked example is a buyer paying an agent a cash deposit: that is a threshold transaction, and the later settlement paid by electronic transfer is not. A TTR is a factual report and does not mean you are suspicious. Splitting cash into amounts under $10,000 to avoid a TTR is structuring, and AUSTRAC gives it as an example of when to lodge an SMR.

Tipping off (s 123). It is an offence for a reporting entity, or its officers, employees or agents, to disclose certain information to another person where the disclosure would or could reasonably be expected to prejudice an investigation (s 123(1)). It does not matter whether an investigation has started (s 123(3)). The offence covers information such as:

that an SMR has been given or is required;
an SMR itself, or a copy;
a document setting out information from one (s 123(2)).

The maximum penalty is 2 years' imprisonment or 120 penalty units, or both.

AUSTRAC's examples of disclosures that could prejudice an investigation:

telling a customer or their associate that you have reported them, or need to;
telling a customer you suspect them, or giving them enough for them to work out that you have formed a reportable suspicion.

AUSTRAC says that sharing information with your own staff or senior management to manage risk will not generally be tipping off. Your policies must include safeguards against it, including keeping information disclosed to staff confidential (Rule 5-13).

Good practice (not legal requirements).

A written cash-handling policy. If you decide not to accept cash deposits, you will lodge fewer TTRs. The obligation does not go away: if cash of $10,000 or more is accepted, the report is due.
A short dated note of every suspicious-matter decision, including decisions not to report. This is the easiest way to show you followed Rule 5-12.

What to do next. Brief every agent on the SMR and TTR deadlines and your internal escalation path. Make sure each staff member knows what not to say once a matter has been escalated.

Up next · Your Obligations

Record-keeping — 7 years of what, exactly

The records the AML/CTF Act requires you to keep, when each seven-year period starts, and what the Act does and does not say about format and storage.

Frequently asked questions

Are EFT payments and PEXA settlements covered by the TTR threshold?: No. A threshold transaction involves the transfer of physical currency, meaning coin and printed money (s 5). Bank transfers, including electronic settlement payments and EFT deposits to a trust account, are not physical currency. In AUSTRAC's real estate example, a cash deposit is a threshold transaction and the settlement balance paid by electronic transfer needs no report.
What if a single matter is both suspicious and a cash transaction over $10,000?: File both. The SMR deadline runs from when you form the suspicion: 24 hours for terrorism financing, otherwise 3 business days. The TTR deadline is 10 business days after the day the transaction takes place.
What is tipping off?: It is an offence for a reporting entity, or its officers, employees or agents, to disclose certain information where the disclosure would or could reasonably be expected to prejudice an investigation (s 123(1)). The information covered includes that an SMR has been given or is required, and the contents of one (s 123(2)). It does not matter whether an investigation has started (s 123(3)). The maximum penalty is 2 years' imprisonment or 120 penalty units, or both.
Do we need to document SMRs we decide not to file?: No rule expressly requires it. AUSTRAC's guidance says you may choose to record your reasons when you decide there are no reasonable grounds for suspicion. If you are still assessing a suspicion, AUSTRAC expects written records of the steps you take. Your policies must provide for timely review and a decision as soon as practicable (Rule 5-12), and you must keep records showing you followed them (s 116). A short dated note is the simplest evidence.

Back to Your Obligations