Suspicious matter reports (SMRs)
When you must file an SMR with AUSTRAC, the deadlines, and the rules around tipping off.
A suspicious matter report is the mechanism by which reporting entities tell AUSTRAC about transactions or behaviours that may relate to money laundering, terrorism financing, tax evasion, or other serious crime.
The legal threshold. Under the AML/CTF Act 2006 (Cth), an SMR must be filed when, in the course of providing or proposing to provide a designated service, you form a suspicion on reasonable grounds that the customer or transaction is connected to criminal activity. "Reasonable grounds" is an objective standard — would a reasonable person in your position, with your information, hold the same suspicion. It is not certainty. It is not proof. It is a suspicion that is more than a vague unease.
Deadlines.
- Terrorism financing suspicions: within 24 hours of forming the suspicion.
- All other suspicious matters (money laundering, tax evasion, proceeds of crime, structuring): within 3 business days.
The clock starts when the suspicion is formed — not when it is "confirmed."
The tipping-off prohibition. Once you have formed a suspicion or filed an SMR, you must not disclose that fact to the customer or to any other person except for permitted purposes (for example, to your AML/CTF Compliance Officer, your lawyer, or AUSTRAC). Tipping off is a separate criminal offence carrying significant penalties. This is why ECDD on a suspicious customer can feel uncomfortable — you cannot tell them why you are asking the additional questions.
Safe harbour. The Act provides civil and criminal immunity for SMRs filed in good faith. You cannot be sued by the customer for filing, you cannot be charged with breach of confidence, and you cannot be held liable for honest mistakes in the report. The protection is broad and is intended to remove any disincentive to report.
How to file. SMRs are filed through AUSTRAC Online. The form requests details of the customer, the transaction, the grounds for suspicion, and supporting evidence. Filing is free. Records of the SMR (and the underlying suspicion) must be retained for seven years.
What is reportable in real estate? Common triggers include cash deposits for residential property, sudden requests to change buyer entities at settlement, third-party funding without explanation, vendors selling significantly below market for opaque reasons, and reluctance to provide identification documents.
The agencies that get this right build a low-friction internal escalation path so frontline agents can flag concerns to the Compliance Officer without making a public decision.
What to do next: Document an internal SMR escalation procedure — who an agent tells, how the decision is recorded, and who files — and brief every agent on the tipping-off prohibition.