- Appendix A – Indicators of potential money laundering/terrorism financing activity
- Appendix B – References and further reading
- Appendix C – Report types
- Appendix D – Information sources
There are numerous indicators which may assist reporting entities to identify potential money laundering or terrorism financing activity.
Although the existence of a single indicator does not necessarily indicate illicit activity, it should prompt further monitoring and examination. In most cases it is the existence of multiple indicators that raises a reporting entity’s suspicion of potential criminal activity and informs its response to the situation.
AML/CTF officers should include these money laundering/terrorism financing indicators in staff training, and encourage staff to use these indicators when describing suspicious behaviours for inclusion in suspect transaction or suspicious matter reports.
Money launderers and terrorism financiers will continually look for new techniques to obscure the origins of illicit funds and lend their activities an appearance of legitimacy. AML/CTF officers should continually review their products, services and individual customers to maximise the effectiveness of their organisation’s internal AML/CTF systems and training.
The list below features some of the major indicators which appear within the case studies of this report and should be treated as a non-exhaustive guide.
- Cash provided by customer has a distinct or unusual odour
- Customer and relative/associate attend the same branch and make structured cash deposits into accounts at the same time
- Customer becomes irate when questioned over financial transactions
- Customer is both the ordering and beneficiary customer for multiple outgoing international funds transfers
- Customer receives international funds transfers described as ‘loan’
- Customer receiving/undertaking high-volume and high-value international funds transfers for no apparent logical reason
- Customer undertaking complicated transfers without a business rationale
- Customer undertaking transactions that appear to be inconsistent with their profile and/or transaction history
- Customer unwilling to produce identification when requested by reporting entity staff
- Frequent cash deposits occurring at different branches on the same day
- International funds transfer to high-risk jurisdictions
- Multiple customers conducting international funds transfers to the same overseas beneficiary
- Multiple international funds transfers paid for with cash, in amounts just below the AUD10,000 reporting threshold
- Outgoing funds transfers sent to offshore entities, followed soon after by incoming funds transfers of similar amounts, from the same offshore entities
- Regular or multiple cash deposits structured to fall below the AUD10,000 cash transaction reporting threshold
- Significant chip cash-outs despite minimal customer play at a casino
- Structuring of gaming chip cash outs to avoid cash transaction reporting obligations
- Sudden large increase in gambling activity inconsistent with customer’s established gambling profile
- Third-parties undertaking transfers to and from accounts for no apparent logical reason
- Unusual transaction activity through business accounts, suggesting the account is being used for unregistered remittance activity
- Use of charitable organisation despite a lack of business rationale
- AUSTRAC, AUSTRAC Typologies and case studies report 2012.
- AUSTRAC, Money Laundering in Australia 2011.
- AUSTRAC, AUSTRAC compliance guide
- Australian Crime Commission, Australian Crime Commission Annual Report 2013–14.
- Australian Taxation Office, Tax avoidance schemes.
- Investopedia, Protect yourself from HELOC fraud.
AUSTRAC receives financial transaction reports and reports of suspicious matters from entities that provide designated services under the AML/CTF Act. The agency also receives a small number of reports from ‘cash dealers’ regulated under the FTR Act.
Additionally, AUSTRAC receives certain cross-border movement reports from the general public.
The types of reports AUSTRAC receives under the AML/CTF Act are:
International funds transfer instruction (IFTI) reports
Under the AML/CTF Act, if a reporting entity sends or receives an instruction to transfer money or property to or from a foreign country, that entity must submit an IFTI report.
In 2013–14 AUSTRAC received almost 85 million reports of IFTIs from industry.
Suspicious matter reports (SMRs)
Under the AML/CTF Act, a reporting entity must submit an SMR if, at any time while dealing with a customer, the entity forms a reasonable suspicion that the matter may be related to an offence, tax evasion, or the proceeds of crime.
Entities must submit SMRs to AUSTRAC within three days of forming the suspicion (or within 24 hours for matters related to the suspected financing of terrorism). The equivalent report type for entities regulated under the FTR Act is the suspect transaction report (SUSTR).
In 2013–14 AUSTRAC received more than 64,000 reports of suspicious matters from industry.
Threshold transaction reports (TTRs)
Under the AML/CTF Act, if a reporting entity provides a designated service to a customer involving the transfer of currency (coin or paper money) or e-currency of AUD10,000 or more (or the foreign equivalent), then the reporting entity must submit a TTR. The equivalent report type for entities regulated under the FTR Act is the significant cash transaction report (SCTR).
In 2013–14 AUSTRAC received more than 5 million reports of cash transactions worth AUD10,000 or more from industry.
Cross-border movement of physical currency (CBM-PC) reports
Under the AML/CTF Act, CBM-PC reports are submitted when physical currency of AUD10,000 or more (or the foreign equivalent) is carried, mailed or shipped into or out of Australia.
When a person carries the currency, a CBM-PC report must be completed at the first Customs and Border Protection examination area upon entry into Australia or before leaving Australia.
When a person mails or ships the currency into or out of Australia, a CBM-PC report must be submitted within five business days of the currency being received in Australia, or at any time before the currency is sent out of Australia.
In 2013–14 AUSTRAC received almost 40,000 CBM-PC reports.
Cross-border movement of bearer negotiable instrument (CBM-BNI) reports
Under the AML/CTF Act, CBM-BNI reports must be completed by persons entering or leaving Australia who are carrying bearer negotiable instruments (such as travellers cheques, cheques or money orders) of any amount, if asked by a Customs and Border Protection or police officer to complete such a report.
In 2013–14 AUSTRAC received more than 600 CBM-BNI reports, which were forwarded by its partner agencies.
The information contained in this report has been generated from the following research material:
- sanitised cases from AUSTRAC’s partner agencies
- AUSTRAC strategic and typology research, including previous AUSTRAC typologies and case studies reports
- publicly available information.
A list of sources which inform the content of this report is included in Appendix B.
AUSTRAC also acknowledges the use of information provided by a number of its partner agencies, particularly the:
- Australian Crime Commission
- Australian Customs and Border Protection Service
- Australian Federal Police
- Australian Taxation Office
- Department of Human Services
- New South Wales Police
- Victoria Police
- Western Australian Police.
The contributions of these agencies complement the research undertaken by AUSTRAC into money laundering and terrorism financing risks and methodologies.