Suspicious matter reports (Reform)

Learn what a suspicious matter report (SMR) is and the timelines for when you have to submit one.

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SMRs alert authorities to potential money laundering, terrorism financing (ML/TF) and other crime. It’s vital your SMRs are accurate and timely to help combat crime and protect our community.

This guidance will help you:

  • identify suspicious activity
  • decide if you have ‘reasonable grounds’ for your suspicion
  • understand when you must submit an SMR
  • report SMRs accurately and on time.

When you must submit an SMR

This section refers to the Act sections 41 and 30(2) and the Rules section 9-3.

 

You must submit an SMR to us if you suspect on reasonable grounds that:

  • information you have may be relevant to crime
  • a customer, future customer or their agent isn’t who they claim to be
  • a person is planning an ML/TF offence using a designated service.

This includes where you suspect on reasonable grounds you have information that concerns:

  • money laundering
  • terrorism financing
  • offences such as tax evasion
  • Commonwealth, state or territory offences.

Reasonable grounds

Reasonable grounds is an objective standard. This means that a reasonable person in your position would form a suspicion based on the facts, circumstances, and information available. 

This includes all the information and circumstances that you know or could reasonably be expected to have known at the time. 

A ‘reasonable person’ is a legal term. It refers to a hypothetical person who displays reasonable or ordinary behaviour or judgment in the circumstances. 

We expect that you understand and explain your suspicion in a way that demonstrates a reasonable person would likely reach the same conclusion where they:

  • review the same material
  • have similar knowledge, experience or training.

You must monitor unusual transactions and customer behaviour for activity which may trigger an SMR.

Learn more about monitoring your customers’ transactions and behaviours in ongoing customer due diligence (CDD).

You must submit an SMR even if you can’t identify the offender or suspected victim.

When SMR obligations apply

SMR obligations apply when you start or propose to provide a designated service, or someone asks for a designated service. 

The obligation applies even if you don’t end up providing the designated service to your customer. This is because criminals may ‘test the market’ to find vulnerabilities with certain providers.  

Examples of when to submit an SMR include if a customer: 

  • tries to structure their payments in amounts under $10,000. You suspect on reasonable grounds that they want to avoid threshold transaction reporting (TTR) obligations. You don’t provide the service
  • asks to open a bank account for them. The details you receive give you reasonable grounds to suspect something is wrong. You think they may commit an offence using the account. You don’t open the account.

Multiple suspicions about a customer

You must submit an SMR to us each time you form a new suspicion on reasonable grounds. This applies even if you’ve already reported someone. You should include reference numbers for any previous SMRs on the same customer. This helps us identify patterns of behaviour and activity. 

For example, you might submit a report because you suspect on reasonable grounds that a customer is structuring their transactions. If the customer returns to request further transactions that raise reasonable grounds for suspicion, submit a separate SMR and include the reference number for any previous related SMRs.

When you don’t need to submit an SMR

This section refers to the Act sections 42(5), 41(2A) and 41(3).

You don’t have to submit an SMR to us if you:

  • provided the service at, or through, a permanent establishment in a foreign country. This doesn’t apply if the designated service is a remittance network service. You may still need to report under the laws of the foreign country.
  • Claim all the information about your suspicion is protected by legal professional privilege (LPP).

If you believe only some information about your suspicion in your SMR is protected by LPP, and you intend to withhold it, you must submit an:

  • LPP form to us on the information being withheld
  • SMR with information not subject to LPP. 

Learn more about legal professional privilege. 

Remittance network providers and affiliates 

This section refers to the Rules section 9-10(2). 

Remittance network provider (RNP) affiliates must also submit SMRs. However, with written agreement, either the affiliate or RNP can make the report.

Submission deadlines

This section refers to the Act sections 41(2)(a)-(b).

You must submit the SMR to us within: 

  • 24 hours of forming the suspicion if related to terrorism financing
  • 3 business days after the day you formed the suspicion for other suspicions. 

When you claim the SMR includes information protected by LPP you have up to 5 business days after the day you form the suspicion to submit the SMR to us. This includes if part of the information is privileged and belongs to someone other than the reporting entity. This timeframe doesn’t apply if your suspicion relates to terrorism financing.

Steps to follow

This section refers to the Act sections 26F(4)(e) and 30(2)(a) and the Rules section 5-12.

Your anti-money laundering and counter-terrorism financing (AML/CTF) policies must help you:

  1. Identify suspicious activity: train your personnel to recognise suspicious activity and monitor for unusual transactions and customer behaviour that may require you to submit an SMR.
  2. Review material: conduct timely review of material relevant to a suspicious matter, such as indicators or suspicious activity and alerts generated by your transaction monitoring program.
  3. Decide if there are reasonable grounds for the suspicion: you must do this as soon as practical.
  4. Submit: SMRs within required timeframe.

What’s timely depends on the level of risk. We expect you to prioritise reviewing and responding to higher risk matters more urgently. This includes suspicious activity that could have a significant impact or cause major damage. For example: 

  • suspected terrorism
  • extensive money laundering
  • child sexual exploitation
  • fraud
  • drug trafficking. 

To make sure your submissions are timely, we expect your AML/CTF policies to:

  • outline how you’ll train personnel to recognise suspicious activity and follow reporting processes
  • include processes to prioritise reviewing and responding to alerts from your monitoring program according to the level of risk
  • include processes for personnel to escalate suspicious activity for internal review
  • specify personnel or teams responsible for assessing suspicious activity and submitting SMRs. 

We generally expect all customer facing personnel to be trained in recognising suspicious activity and referring it to the appropriate person in your business.

The individual or team responsible for assessing this suspicious activity and submitting SMRs could then be either:

  • yourself, if you’re a sole trader
  • an AML/CTF compliance officer
  • a dedicated team in larger organisations.

You should also consider how to avoid ‘information silos’. This means personnel investigating SMRs can quickly access information they need. Include processes to make sure you report within required timeframes.

Identify suspicious activity

We expect you to design your AML/CTF program to identify and include:

  • indicators of suspicious activity specific to your business’s risk profile and the industry you operate in
  • common indicators of crime.

Learn more about how to monitor your customers, what to monitor for and responding to unusual transactions and behaviours.

Common indicators of suspicious activity

These common indicators of ML/TF and other serious crimes can help you identify suspicious activity. 

One indicator on its own may not amount to suspicious activity. There may be legitimate reasons for the behaviour or transactions. 

Multiple indicators may be required depending on the circumstances. 

Customer behaviour

The customer:

  • wants to be anonymous
  • appears to be acting for an undisclosed third party
  • appears nervous, overly defensive, in doubt or evasive when asked for information
  • refuses to give reasons for wanting a designated service or provides vague information
  • asks if you report to government authorities such as us, the Australian Taxation Office or law enforcement agencies.

Customer identification

The customer:

  • has forged documents or they seem altered
  • provides identification information different to their payment information
  • is in adverse media reports or subject of law enforcement enquiries
  • uses name variations or aliases from one transaction to another
  • refuses or is reluctant to provide identification information
  • appears on a sanctions list.

Unusual or complex transactions

The customer:

  • makes unusually large or complex transactions
  • profile doesn’t match their transaction activity
  • transacts or requests to transact with persons in higher-risk countries and jurisdictions
  • suddenly changes nature or frequency of transactions
  • makes rapid transfers between third parties
  • makes ‘u-turn’ transactions with money sent overseas and a portion returned
  • splits transactions into amounts under $10,000 with no apparent purpose. This is called structuring
  • trades high-value goods and assets, inconsistent with their profile. For example, bullion, luxury goods and investments if they’re a student.

Grounds for suspicion

Once you’ve identified suspicious activity, you must review that activity and relevant information to determine whether you have reasonable grounds for suspicion.

We expect you to:

  • conduct an assessment of the suspicious activity
  • decide your response and next steps.

If you form a suspicion on reasonable grounds at any point, you must submit an SMR to us within the required timeframe. You don’t need to be certain that a crime has occurred.

Initial assessment 

This section refers to the Rules section 5-12(a)-(b). 

Your policies must help you to conduct a timely review of material when deciding whether to submit an SMR. 

To help decide, you may consider:

  • the ML/TF risk rating of the customer
  • if their behaviour or transaction activity matches their profile
  • the customer’s identity and source of wealth and source of funds
  • if the customer is acting on instructions of a third party
  • legitimate reasons for unusual activity
  • indicators of suspicious activity
  • alerts generated by your transaction monitoring systems
  • previous associated investigations.

Decide next action following the initial assessment

This section refers to the Act sections 30(2)(a) and 111.

We expect you to take appropriate action after your initial assessment.

Outcome Action
You decide there’s no reasonable grounds for suspicion

You may choose to make a written record of the reasons for the decision. 

These records can be used if there’s more suspicious activity by the same customer. It will help you to better understand your customer’s behaviour if you need to consider whether to submit an SMR in future. It also demonstrates you’re monitoring customers for unusual transactions and behaviour.

No further action required.
After an initial assessment, you’re still suspicious, but you don’t have enough information to confirm reasonable grounds 

We expect you’ll continue to monitor the customer, conduct further investigations where required and keep written records of any steps taken in relation to the suspicion. 

If you don’t, you may not meet your obligation to monitor customers for unusual transactions and behaviour that could lead to an SMR.
You decide you have reasonable grounds for suspicion

You must submit an SMR within the appropriate timeframe. 

If you continue providing the designated service, you must conduct enhanced CDD in line with your AML/CTF policies. 

Enhanced customer due diligence

This section refers to the Act sections 32(b) and 41(2).

You must conduct enhanced CDD if both of the following occur:

  • you’re required to submit an SMR in relation to the customer
  • you continue providing designated services to them.

If you have applied enhanced CDD previously on the customer, we expect that you include a summary of the enhanced CDD and what it showed in your SMR. 

You must not delay submitting your SMR to complete enhanced CDD if you already have already formed a suspicion on reasonable grounds.

What to include in an SMR

This section refers to the Rules sections 9-2, 9-3 and 9-4.

Your SMR must include details of:

  • your business
  • the report date
  • when the suspicion is formed on reasonable grounds
  • the individual completing the report. If the report is system generated, include details of the individual accountable for completing and submitting the report
  • the individual who can provide information about forming the suspicion
  • the suspicious activity, including designated services, accounts and transactions involved
  • the individual or non-individual the suspicion relates to.

If used in the transaction, your SMR must also include information about:

  • online activity
  • products or instruments, for example, gaming chips, store value cards, precious metals
  • transfers of property, such as real estate or bullion
  • virtual assets.

A comprehensive list of details required within your SMR is available at the link below. 

Learn more at Division 1 of Part 9 of the Anti-Money Laundering and Counter-Terrorism Funding Rules (the Rules).

The information above differs from what you currently need to provide in an SMR and you’ll need to provide it in a new SMR form (this will be available before the laws start).

When current reporting entities need to change to the new SMR form 

This section refers to the Rules section 12-1.

You’ll need to continue using the current SMR form until 1 July 2026.

From 1 July 2026 to 30 March 2029, current reporting entities will have the choice to submit an SMR using:

This only applies if you were on the Reporting Entities Roll on 30 March 2026. Newly regulated businesses can’t enrol before 31 March 2026. Learn more about the new industries and services we will regulate.

If you weren’t on the Reporting Entities Roll on 30 March 2026, you'll need to use the new SMR form from 1 July 2026.

Writing your grounds for suspicion

Your SMR must include a description of the grounds for your suspicion.

An effective grounds for suspicion clearly explains:

  • a summary of your suspicion
  • what suspicious activity you believe is or has occurred
  • what led you to form the suspicion

Structuring your grounds for suspicion

In the first sentence you may consider including a high-level summary of the suspicious activity and indicators for your suspicion.

After a summary, you may consider providing: 

  • a chronological sequence of events
  • other background to the suspicious activity. 

You could also consider summarising: 

  • who – the persons involved, both individuals and non-individuals and their involvement
  • what – the types and purpose of designated service involved and suspicious activity
  • where – where the activity took place
  • when – times and dates of the activity
  • why – your reason for suspicion and crime type you believe may be involved
  • how – you believe the activity is conducted.

Include as much detail as possible. Your insights and expert knowledge help make your SMRs more valuable. 

When providing information about the person, this could include: 

  • their behaviour – were they nervous or do you suspect they were acting for a third party?
  • their occupation or source of wealth
  • associates you believe may be linked
  • additional information such as their identification, phone numbers or history
  • a physical description
  • any details from social media or the internet
  • any relevant information from previous reports.

If you have limited information about someone’s identity, your SMR could instead include: 

  • a physical description
  • video footage or photographs
  • passport details
  • address
  • phone numbers
  • email address.

You may:

  • keep the language simple, clear and concise
  • break up information into short paragraphs
  • use subheadings where appropriate
  • use appropriate punctuation
  • write in plain English
  • avoid acronyms and jargon
  • assume we and our partners aren’t experts in your sector.

Effective introductory sentence

Example 1

‘Customer A requested to transfer money to Person B using what staff thought was a false ID.’ 

Example 2

‘Customer C bought $15,000 worth of cryptocurrency and transferred it to Person D’s crypto wallet. The activity is inconsistent with their usual account use. When questioned, Customer C didn’t know basic details about Person D and said they were just helping a friend. 

We suspect Person D may be part of a fraud or money laundering scheme.’

These examples clearly state the:

  • crime you believe might be occurring
  • parties involved
  • type of designated service. 

Your SMR would then include the indicators you identified.

Ineffective introductory sentence 

Example 1

‘Customer A’s activity is considered suspicious.’ 

Example 2

‘Customer C made a transaction that looked unusual and we’re submitting this report just in case it might be suspicious.’

These examples don’t contain any specific details about:

  • why you believe the parties involved or the transaction is suspicious
  • what crime the person could be engaged in.

You shouldn’t assume we have knowledge of the individual or activity. Always provide complete details, and make sure your report is correct and complete. 

We expect you to use generally known acronyms. We’re unlikely to know:

  • the name of your IT systems
  • internal team names
  • specific details of your business and industry.

Ending a customer relationship

You don’t have to end your relationship with a customer if you submit an SMR. You can continue to provide them with designated services. 

However, you must appropriately mitigate or manage any ML/TF risks. This includes applying enhanced CDD.

For high-risk customers, controls to mitigate or manage the risk could include:

  • limiting the channels, services or thresholds they have access to
  • increased monitoring of the customer’s transactions and behaviours. If you can’t appropriately mitigate or manage the risk, we expect you to consider whether to continue to provide designated services to the customer.

Tipping off

If you decide to stop providing designated services to a customer, you must not:

  • tell them you did this because of their suspicious activity
  • provide information that establishes you submitted an SMR
  • tell them you are required to submit an SMR.

It’s a criminal offence to share SMR details if it could reasonably prejudice an investigation. 

Learn more about tipping off.

Examples of timely and quality SMRs

Below are 2 examples of timely and quality SMRs.

Reasonable grounds established through enhanced CDD 

An RNP’s transaction monitoring system alerts their financial crime analyst to several transactions made by the same customer. The system identified a customer sending 5 payments within 3 months to an individual in another country. This country has a high child exploitation risk.

The payments were all valued between $50 and $250, with payment descriptions of ‘family support’. 

Small financial transactions to high-risk countries are financial indicators of sexual exploitation of children. 

Staff contact the customer who says the payments are for his family who live overseas. 

Noting the risk of child sexual exploitation, the analyst conducts enhanced CDD according to their AML/CTF policies and a review of transactions. They also do internet searches, including social media.

The investigation finds:

  • no history of the customer making payments of this type
  • the customer made earlier payments to someone in another country at risk of child exploitation
  • their social media shows no connection between the customer, their family, or the 2 countries.

This information gives the AML/CTF compliance officer reasonable grounds for suspicion. They submit an SMR within 3 business days. 

Reasonable grounds established when assessing indicators 

A bank’s transaction monitoring system flags 12 cash deposits in a month from a single customer. All transactions are between $7,000 and $9,900. 

A member of the financial crime team does an initial assessment. They find the customer doesn’t normally make cash deposits. They identify other indicators of suspicious activity. This includes the customer:

  • is an international full-time student working casually in hospitality
  • has been with the bank for 6 months with the account dormant until these deposits. 

The staff member investigates the customer's source of funds and source of wealth. The customer claims the cash is from their salary. 

The staff member believes there are indicators the customer may be a money mule and is structuring payments. The staff member believes the customer is laundering proceeds of crime on behalf of a criminal network. 

The bank decides there are reasonable grounds for suspicion and submits an SMR within 3 business days. 

This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened. 

The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.

This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

Last updated: 16 Oct 2025
Page ID: 1338

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