SMRs are only related to providing a designated service. This includes when you start providing designated services, or when you are asked about providing designated services as part of your normal business activities.

You must submit an SMR if you or anyone in your business or organisation suspects on reasonable grounds that a customer is not who they claim to be, or the designated service relates to any one of the following:

• terrorism financing
• money laundering
• an offence against a Commonwealth, State or Territory law
• proceeds of crime
• tax evasion.

Affiliates of a remittance network provider (RNP) must also report SMRs, however if the affiliate and the RNP have a written agreement, and the suspicious transaction has been made using the RNP’s network, either one can submit the SMR.

You do not have to submit an SMR if you provided the designated service at or through a permanent establishment in a foreign country.

If the person may be the victim of a crime rather than the offender

If your customer is the victim of a crime, you should also submit an SMR. See Submitting your SMR for information on how to record this.

Reasonable grounds for suspicion

You must submit an SMR if you have ‘reasonable grounds’ for suspicion. This means that after considering all the information and circumstances available, a reasonable person would conclude that there is a relevant suspicion and an SMR should be submitted.

If you or anyone in your business or organisation notices something unusual, you must conduct enhanced due diligence checks to determine if you have reasonable grounds for your suspicion.

Once the appropriate person in your business or organisation has completed the checks and forms a suspicion, you must submit an SMR within the required timeframes. 

You or your staff, including your AML/CTF compliance officer don’t have to know exactly what criminal activity the customer might be involved in, or where the suspect funds or property came from, to make an SMR.

It’s important to remember that not all unusual customer behaviour is suspicious. Sometimes customers have irregular transaction patterns or account activity. When this happens, you should use enhanced customer due diligence procedures to help you decide if the activity is suspicious and needs to be reported through an SMR.

How to identify suspicious activity

To help you identify suspicious activity and prevent customers using your business or organisation to launder money or finance terrorism, you must have systems and controls in place, including:

• ML/TF risk assessment
• customer identification procedures
• a transaction monitoring program
• AML/CTF risk awareness training program for employees

They should be designed to help your staff identify and check suspicious activity or customer behaviour so you can decide whether you need to report it to us.