Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reporting to AUSTRAC is now part of the compliance responsibilities that conveyancers and property lawyers must meet.
With Tranche 2 in effect, most firms have moved past setting up their AML/CTF program and into running it. Reporting is where that shift becomes real, because it is the point at which your internal work leaves the firm. Knowing which report applies, and when, matters as much as knowing the obligations exist.
What goes to AUSTRAC, and what stays in your file?
There are four AUSTRAC reporting obligations that apply to conveyancers and property lawyers providing designated services:
- Suspicious Matter Reports (SMRs)
- Threshold Transaction Reports (TTRs)
- Annual compliance reports
- Cross-Border Movement Reports (CBMs)
Nothing else your firm produces during customer due diligence is reported. That includes your customer risk rating. Rating a client low, medium, or high is an internal record that stays in your file, and it does not go to AUSTRAC.
A high risk rating also does not require an SMR on its own. A client can be legitimately high risk, for example a foreign politically exposed person, an unfinanced purchase, or a complex ownership structure, without anything suspicious occurring. An SMR is only required where your firm forms a suspicion on reasonable grounds.
1. Suspicious matter reports (SMRs): When must you report a suspicion?
An Suspicious Matter Report may be required when your firm forms a suspicion on reasonable grounds in circumstances covered by the AML/CTF Act. Where one is required, you must submit it within three business days of forming the suspicion, or within 24 hours if the suspicion relates to terrorism financing.
In a property matter, warning signs might include unexplained sources of funds, unexpected third-party payments, inconsistent client information, unusual transaction structures, or attempts to avoid reporting thresholds. None of these automatically requires an SMR. Your firm needs to weigh the information and circumstances available and decide whether there are reasonable grounds for suspicion. AUSTRAC’s risk indicators for legal professionals set out further examples.
Can your firm keep acting on the matter after submitting an SMR?
Lodging an SMR does not mean your firm has to stop acting. In most cases the matter continues while your monitoring and any further reporting obligations run alongside it.
What the tipping-off rule covers
Once an SMR is submitted, certain information about it must stay confidential. Disclosing it is known as tipping off, and the test under the reformed provisions is whether disclosure would or could reasonably be expected to prejudice an investigation. Telling a client that an SMR has been submitted about them is the clearest example.
Disclosures for permitted purposes are not tipping off, including obtaining legal advice or sharing information inside your firm to manage the risk. The rule also does not prevent reasonable enquiries or continued due diligence. Your procedures should set out who can access SMR information, and how staff communicate with clients while a matter is under review.
2. Threshold transaction reports: when does the $10,000 cash threshold apply?
A Threshold Transaction Report applies where a designated service involves $10,000 or more in physical currency, including the foreign currency equivalent, and must be submitted within 10 business days after the date of the transaction. The threshold applies to physical cash, not transaction value. A $500,000 electronic settlement is not a threshold transaction, whatever its size.
Smaller cash payments may still require attention if they appear to be deliberately split to avoid the threshold. This is known as structuring, which is an offence in its own right. While the individual payments may not trigger a TTR, the pattern could give rise to an SMR. Depending on the circumstances, a transaction may therefore require a TTR, an SMR, both, or neither.
3. Annual compliance reports: what does your firm report each year?
Unlike the other reports, an Annual Compliance Report is not triggered by a particular transaction. It is a yearly report on how your firm met its AML/CTF obligations. The questions are tailored to your business and show AUSTRAC how your compliance framework operates in practice, and where firms may need further guidance or supervision.
The compliance reporting period has moved from the calendar year to the financial year for all reporting entities, not only newly regulated ones. Because the report looks back over the full year, accurate records and consistent processes throughout make it easier to complete.
4. Cross-border movement reports: are these likely to apply to your firm?
A Cross-Border Movement Report applies when $10,000 or more in physical currency, or certain bearer negotiable instruments, is carried, sent, or received across Australia’s border. Bearer negotiable instruments are payable to whoever holds them, and include cheques, money orders, and traveller’s cheques. Electronic transfers through a bank or remittance provider are not included.
This obligation can apply to your firm, though it is unlikely to come up in a conveyancing practice. Unlike the other three reports, it applies to any person, not only in connection with a designated service. Where it does apply, the report is due before you pass through Customs, before the instruments are sent, or within five business days of receiving them from overseas.
Build reporting into your AML/CTF process
Reporting works best where it connects to the checks your firm already completes, from customer due diligence and risk assessments through to source of funds enquiries and ongoing monitoring. That means clear processes for identifying unusual activity, escalating concerns, documenting decisions, and reporting where required.
The triSearch AML/CTF Compliance Centre brings these steps into one structured workflow within triConvey, supporting Tranche 2 reporting without the need for spreadsheets or manual tracking. Reports are also retained 7 years for audit purposes.
To see how reporting works in a live matter, learn more about the triSearch Compliance Centre or book a walkthrough with your Account Manager.
triSearch provides software solutions for conveyancing processes. Users remain responsible for compliance with applicable laws and regulations.
