You don’t have to end your business relationship or stop providing designated services to a customer because you have formed a suspicion about them. You should use your own risk-assessment policy and procedures to decide whether to continue doing business with them.
If you do decide to end the business relationship, you must not tell the customer that you have formed a suspicion or that you have reported an SMR to us. If you do so, it is called ‘tipping off’ and is against the law.
About ‘tipping off’
You must not tell anyone other than AUSTRAC that you have formed a suspicion about a customer or that you have submitted an SMR, unless you have an official exemption. Revealing this information is an offence that’s punishable by up to two years jail and/or a fine of up to 120 penalty units. Find out more about consequences of not complying.
Your other obligations when you submit an SMR include:
- not revealing any information that might reasonably lead a person to conclude that you have formed a suspicion about them or have told AUSTRAC about that suspicion
- not revealing any requests AUSTRAC or law enforcement agencies make for more information about an SMR.
Once you form a suspicion about a customer, be discreet when seeking further details so they don’t realise you may make, or have already made, an SMR. However, asking the customer for more information, including about their identity or the source or destination of their funds, is not considered ‘tipping off’.
You can’t give information about a specific SMR to any external parties appointed to review your AML/CTF program, even if they are reviewing your SMR obligations.
Exemptions
There are some situations where you are allowed to disclose that you have formed a suspicion about a customer. The exemptions to ‘tipping off’ are when:
- you are a legal practitioner or qualified accountant who has suspicions about a client and want to persuade them not to do something illegal
- you want to get legal advice relating to your suspicion from a legal practitioner
- you are a member of a designated business group (DBG) with a joint AML/CTF program and need to inform other members of the group of the risks involved in dealing with the customer
- you are a member of a corporate group and need to tell someone in the group about the risks involved in dealing with the customer
- you are a remittance network provider(RNP) giving information about the customer to one of your affiliates, or you are an affiliate giving information to your RNP
- you are an authorised deposit-taking institution (ADI) giving customer information to an owner-managed branch of the same ADI
- you are disclosing information in compliance with a Commonwealth, state or territory law
- you are disclosing information to an Australian law enforcement body, such as the Australian Federal Police or the Australian Crime Commission
- you are disclosing to a law enforcement agency that a customer may be on a government sanctions list and you are freezing their assets under the Charter of the United Nations Act.