Discover our latest risk insights and what suspicious activity indicators to look for if you’re an accountant. 

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From 1 July 2026, anti-money laundering and counter-terrorism financing (AML/CTF) obligations apply to accountants. 

As part of these obligations, you need to conduct a money laundering and terrorism financing (ML/TF) risk assessment and know what suspicious activity to look for with your clients. The following suspicious activity indicators will help you to identify potential ML/TF as well as other serious criminal activities. 

This page provides an overview and does not cover every risk, or every service, relevant to accountants. 

You must consider information we’ve communicated to you that’s relevant to your money laundering, terrorism financing and proliferation financing risks.

This information will help you to:

  • understand money laundering risks in your sector
  • inform your ML/TF risk assessments
  • strengthen your AML/CTF policies
  • identify suspicious activity. 

Background

Our money laundering national risk assessment found services provided by accountants pose a high money laundering risk in Australia. 

While our risk assessments on terrorism financing and proliferation financing identified no specific risks for accountants, your awareness of these risk environments is essential. 

This page focusses on the money laundering risks for accountants.

Who may exploit your services

Criminals, domestically and internationally, can exploit your professional services. Your expertise can also be used to give the impression of respectability and legitimacy. 

Common money laundering processes involve criminals creating distance between themselves and profits from criminal activity using: 

  • business structures and trusts
  • third parties
  • intermediaries such as lawyers and accountants.

You may not be aware you are helping criminals.

Providing designated services

Accountants are subject to AML/CTF obligations when they provide designated services to their clients.

Learn more about the designated services accountants provide.

Main risks and their indicators

The 4 areas of money laundering risks and suspicious indicators are: 

Kinds of clients

Your professional services are an easy target for illicit activities. You should consider a range of factors in assessing client risk when working with: 

  • high-net worth individuals – who may have more complex business and financial arrangements, including offshore accounts or trusts
  • politically-exposed persons (PEP) due to potential exposure to fraud, bribery, corruption and links to high-risk jurisdictions
  • clients you have limited face-to-face interaction with
  • non-residents, particularly from high-risk jurisdictions
  • clients connected to industries associated with higher ML/TF risks, including but not limited to those listed in Australia’s national risk assessments
  • clients where their business structure makes it difficult to identify the true beneficial owner
  • clients who make it hard to understand details about the purpose of their business, its ownership or the nature of their transactions
  • companies operating, or with major subsidiaries, in high-risk jurisdictions.

You should also find out if your clients are themselves in sectors we regulate under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act). This may help to limit any risks linked to them.

Indicators of suspicious clients

Red flag indicators of suspicious financial activity are valuable tools for detecting illicit behaviour linked to ML/TF and other crimes. Below are red flags you should be aware of.

On their own, one of these indicators may not suggest suspicious activity. If you’re unsure whether there are reasonable grounds for a suspicion, you should conduct further monitoring and examination, including applying enhanced customer due diligence measures.

Client behaviour indicators

It could be a red flag if your client: 

  • avoids face-to-face meetings
  • is obstructive or secretive in their dealings with you
  • appears nervous or defensive when questioned
  • doesn’t seem to understand the business sector they’re operating in
  • ends the relationship after you ask for more information
  • appears to be following instructions of third parties
  • is reluctant to prove their identity or provides vague information during KYC processes
  • has documents in an unexpected format or seem forged or altered
  • tries to avoid know your customer (KYC) processes
  • has an unusual level of knowledge about AML/CTF requirements
  • provides identity documents with inconsistencies or different details such as their name, address, date of birth or phone number
  • gives an address or phone number used by multiple people who don’t appear related
  • has multiple bank accounts in their name, or the names of family members or corporate entities, with no clear purpose
  • has suspicious transactions or account activities but refuses or can’t answer questions about them
  • is prepared to pay higher fees without clear reasons.

When your client operates a business, they could raise red flags if it: 

  • appears to have incorrect or misleading information on official registers. This includes the Australian Securities and Investments Commission, Australian Business Register or international equivalents. They may also be reluctant to correct the information
  • provides business documents with activity that can’t be traced through company books
  • uses complex business ownership structures, including nominee shareholders or bearer shares
  • provides only a post office box number without a residential or business address. 

Client profile indicators

The client profile could raise red flags when they: 

  • have been subject to negative media reports or other adverse information from a reliable source, connecting them to profit-generating criminal activity
  • have a lifestyle or transactions inconsistent with what you know about their business and personal information
  • have changed professional advisers often and without real reasons, or has been refused service by others
  • take on work or employment outside their normal range of goods and services
  • ask for shortcuts or speedy transactions, or other activities without clear reasons
  • have established a series of new relationships with different financial service businesses
  • are a politically-exposed person (PEP) or closely linked to one. You must always treat foreign PEPs as high-risk clients
  • are on Australian or United Nations Security Council targeted financial sanctions lists or are close associates of entities on these lists.   

Another red flag is if the client is from, or present in, a high-risk country due to associations with: 

  • money laundering, including organised crime
  • terrorist acts or terrorism financing, including providing money or support for terrorist activities
  • proliferation of weapons of mass destruction
  • corruption
  • serious fraud.

A client operating as a business could raise red flags if it: 

  • is engaged in a business or industry known to have higher ML/TF risks, including but not limited to those identified in Australia’s national risk assessments
  • provides records of business losses, but continues to operate without a reason
  • engages in a service unrelated to their profile with no economic reason
  • sells an interest in a new company to someone with no clear association
  • says they have a business entity without any, or enough, knowledge about their business, its operations or sector
  • gives multiple addresses for the same business or changes their registered address or principal place of business address with no reason
  • gives a residential address as their business address where the circumstances don’t make sense for the business to be run from a person’s home
  • has no employees, which may be unusual for their type of business
  • is suspected of using personal accounts for business or vice-versa.

Kinds of services

You provide services criminals can exploit. This includes setting up trusts which could be used to hide ultimate ownership of assets through complex layers. You might also introduce your clients to financial institutions and help to open accounts. 

Some accountancy services vulnerable to money launderers include:

  • financial and tax advice – criminals may ask for help placing assets out of reach of local authorities or setting up offshore trusts and companies for tax avoidance
  • bookkeeping – criminals may disguise transactions or delete them from records. This can include accounts receivable and accounts payable
  • creating corporations or complex legal arrangements to avoid detection. Criminals may wish to create companies, trusts, and charities designed to distance themselves from criminal activity
  • wanting nominee shareholders, trustees or directors for legal persons or complicated arrangements – criminals will avoid association while retaining effective control of a business
  • trying to hide ultimate ownership and control of assets through complex management layers
  • buying or selling properties or businesses – criminals may use large purchases to hide, transfer or invest unlawful funds
  • managing funds, accounts, securities or other assets. This includes cash or shares transactions, foreign exchange operations, issuing or cashing cheques, and international funds transfers
  • providing a registered or correspondence address. This helps criminals hide their true location and make their activities appear more legitimate
  • introductions to banks and other financial institutions, and vice versa.

Companies and trusts

Companies and trusts – and other similar legal arrangements – are used by criminals to launder money or move proceeds of crime.  

Criminals may ask you to manage companies and trusts to lend greater respectability and legitimacy to their activities. 

While shell companies – without ongoing business activities or assets – may be used for transactions, they can also hide beneficial ownership. Criminals may use this to add legitimacy to their operations.

Criminals may also misuse shelf companies to access businesses ‘sitting on the shelf’ for a long time. This can give the impression of a reputable trading company, as it has been around for years. 

You may be asked to hold shares as a nominee, where there are privacy, safety or commercial concerns. However, criminals can exploit nominee shareholders to hide asset ownership.

To assess and mitigate any potential ML/TF risks of the relationship, you need to know your customer. You should identify beneficial owners when establishing business arrangements to prevent helping criminals.

Where you act as nominee, you should understand the reasons. You should always verify the identity of the beneficial owner and make sure their purpose is legitimate.

Indicators of suspicious client activities 

Red-flag indicators may help you identify suspicious client activities in relation to the services you provide.

Source of funds or wealth

It could be a red flag if your client: 

  • has high-value assets with no clear funding source
  • changes instructions multiple times or in a short period of time without good reason
  • has funds or transaction activity that doesn’t match their financial standing, usual activities or employment status
  • has transactions exceeding projected activity at the start of the relationship
  • makes transactions inconsistent with their expected and declared business. For example, no payroll payments
  • won’t identify the source of their wealth or provides false, misleading, or wrong information
  • makes frequent overseas transfers that don’t match their profile
  • conducts back-to-back property transactions, with rapidly increasing values or purchase prices
  • sets up companies with an unknown equity source or an equity source that’s difficult to value
  • is involved in business agreements or payments where the asset value is hidden or hard to determine
  • wants you to perform a series of complicated transfers on their behalf which may hide the true funding source from the person receiving those funds.

Unusual transactions and requests

It could be a red flag if your client: 

  • uses cryptocurrency or other virtual assets that don’t match their profile
  • makes unusual requests with no clear economic reason
  • splits or structures transactions to avoid identification or reporting thresholds of other financial services
  • stops activities or transactions after receiving funds, asks for a refund, or wants to send refunded money to a third party
  • receives money from unrelated or unknown third parties without legitimate reason
  • transacts in rounded sum values, not typical of what’s expected
  • has accounts used for pass-through activities. For example, to receive and forward funds to others
  • they may make quick ‘u-turn’ transactions, with money transferred to and from the same accounts for no apparent reason
  • has complicated ownership structures, including cross-border arrangements, with no real or economic reason
  • asks you to form a business or act for a legal person or arrangement against your advice on the appropriateness of the structure or related matters
  • uses one company for transactions and trade before quickly replacing it with a new company
  • requests the creation of a trust where is it unlikely to be appropriate or necessary
  • makes unusual changes to their company’s ownership and legal structure. This includes changing directors, shareholdings or company location
  • is involved in transactions or requests for financial services, such as loans, that don’t make commercial sense, or with early settlement
  • transfers money for no economic benefit
  • has a sudden and unexplained change to their financial profile, activity or transactions
  • makes transactions between individuals or entities not usually connected. For example, a food importer dealing with a car parts exporter
  • has transactions consistent with trends in criminal activity
  • pays you by a method not in line with their profile
  • offers to pay higher fees for services
  • asks for quick transactions for no reason.

Requests for complex arrangements

It could be a red flag if your client: 

  • asks for complex business structures to hide beneficial ownership
  • asks for your assistance in creating complex structures in an effort to avoid tax
  • asks for a large volume of companies to be created
  • asks for a large volume of company or trust creations at one time (wholesale sales)
  • transfers large amounts between subsidiaries or similarly-controlled companies for no apparent reason
  • uses aliases or name variations from one transaction to another
  • provides confusing transaction details, or knows little about their purpose
  • wants to create or use shell or shelf companies, to distance themselves from funds.
  • transfers money in and out of an account on the same day or a short period without a legitimate reason
  • is involved in significant bank transfers to or from multiple beneficiaries that don’t match the expected account use.

Delivery channel risk

Delivery channel risk is how you onboard and provide services to clients. The risks are higher when you act remotely or through intermediaries. Personal contact can help you spot red flags, while online interactions may increase your risks.

Delivery channel suspicious indicators 

Red-flag indicators can help you to identify suspicious circumstances relevant to client interactions. These could include, if the client:

  • avoids direct contact, or requests services with no face-to-face meetings
  • asks for unreasonable anonymity
  • engages you through a third party with no clear reason.

Foreign jurisdiction risk

You may deal with clients, transactions and activities with links in foreign jurisdictions. Exposure to foreign jurisdictions creates ML/TF risks. It provides opportunities:

  • for illicit funds to move overseas that are proceeds from crimes committed in Australia
  • to fund terrorist activity or proliferation of weapons of mass destruction
  • for the proceeds of foreign money laundering to be brought into Australia. 

 International transactions can also: 

  • add complexity
  • hide beneficial ownership and the true customer’s identity
  • increase the risk of tax evasion
  • make it harder for authorities to investigate or prosecute alleged criminal activity.

Factors that increase ML/TF risks include links to a country:

  • with weak governance or AML/CTF regulations, or that is a tax haven or secrecy jurisdiction
  • with high rates of corruption, tax evasion or other serious crime
  • subject to Australian sanction laws or similar restrictive measures. This includes countries believed to be high-risk or non-cooperative by the Financial Action Task Force (FATF)
  • financing or supporting terrorist acts, or associated with a terrorist organisation
  • engaged in proliferation of weapons of mass destruction, or a country used for diverting funds for proliferation financing
  • in a conflict zone
  • known for people trafficking. 

Foreign jurisdiction suspicious indicators 

Red-flag indicators for clients with international connections could include when the client: 

  • is from a high-risk jurisdiction, asking for business representation in Australia
  • has a business owned or controlled by an parent company from a high-risk jurisdiction
  • transfers money or virtual assets to or from a country they have no connection with
  • transfers money or virtual assets to or from entities in high-risk countries
  • uses multiple foreign bank accounts for no reason
  • transacts with jurisdictions known to produce or move drugs, or precursor chemicals, without an economic reason
  • pays unusual consultancy fees to offshore businesses
  • deposits or receives funds in several accounts, then consolidates and transfers it overseas
  • uses complicated ownership structures with no legitimate or economic reason
  • makes frequent overseas transfers inconsistent with their financial profile.

The lists on this page aren’t exhaustive. You should consider other indicators specific to your business’s individual risk profile and circumstances. 

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: 1364

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