How to File a Suspicious Matter Report (SMR): Guide with Real Examples

Filing a Suspicious Matter Report (SMR) is one of the most important — and most stressful — obligations for reporting entities. Get it wrong, and you risk penalties. Get it right, and you're helping protect Australia's financial system.

This guide walks you through exactly how to file an SMR, with real-world examples.

When Must You File an SMR?

You must file an SMR when you form a suspicion on reasonable grounds that a transaction or client:

• Is related to money laundering or proceeds of crime
• Is related to terrorism financing
• May be relevant to the investigation or prosecution of a serious offence

The key word is "suspicion" — not certainty. You don't need proof. If something feels wrong, it probably warrants a report.

SMR Filing Deadlines

These deadlines start from when you form the suspicion, not when the transaction occurred.

Warning: Cointree Pty Ltd received a $75,120 fine for submitting SMRs late — even though they voluntarily disclosed the breaches and cooperated fully. Deadlines matter.

The 5-Step SMR Filing Process

Step 1: Identify the Suspicious Activity

Common triggers across Tranche 2 industries:

For Accountants:

• Client requests complex corporate structures with no clear business purpose
• Unexplained large cash deposits into trust accounts
• Client reluctant to provide source of funds information
• Transactions inconsistent with the client's known financial profile
• Requests to move money through multiple entities quickly

For Lawyers & Conveyancers:

• Property purchase price significantly above or below market value
• Buyer provides funds from an unrelated third party
• Client wants to settle in cash or cryptocurrency
• Nominee purchases where the true buyer is hidden
• Unexplained urgency to complete a property transaction

For Real Estate Agents:

• Buyer shows no interest in property details, only the transaction
• Offers significantly over asking price with no negotiation
• Multiple properties purchased in quick succession
• Funds from overseas with no clear connection to Australia
• Client uses multiple names or identities

For Jewellers:

• Customer pays $9,500 in cash (just under the $10,000 TTR threshold)
• Multiple transactions by the same customer in a short period
• Customer uninterested in quality or value — only wants to complete the purchase
• Requests to buy and immediately resell precious metals
• Customer provides inconsistent identification

Step 2: Gather the Facts

Before filing, document:

• Who: Full name, date of birth, address, ID numbers of the person involved
• What: Description of the transaction(s) — amounts, dates, methods
• When: Date and time the suspicious activity occurred
• Where: Location of the transaction, branch/office
• Why: What made you suspicious — the specific indicators or red flags
• How: The method used (cash, bank transfer, crypto, etc.)

Step 3: Write the Grounds for Suspicion (GFS)

The GFS is the most critical part of your SMR. This is what AUSTRAC analysts read to decide whether to investigate.

AUSTRAC's updated guidance (March 2026) emphasises:

• Use standard case — not ALL CAPS
• Write in plain, clear language
• Organise facts under logical headings
• Be factual — describe what happened, not your conclusion

GFS Example 1: Accountant — Unexplained Cash Deposits

Client background John Smith has been a client since 2024. He operates a small landscaping business with an annual turnover of approximately $150,000.

Suspicious activity Between 1 January and 15 March 2026, Mr Smith deposited $87,000 in cash into his business trust account across 12 separate transactions. The largest single deposit was $9,800. The deposits are inconsistent with his known business income and he has not provided invoices or contracts to explain the increase.

Additional concerns When asked about the source of the funds, Mr Smith became evasive and stated the money was from "private jobs" but could not provide details. He requested that the funds be transferred to a new company he asked us to set up, Smith Holdings Pty Ltd, which has no apparent business activity.

Risk indicators

• Cash deposits inconsistent with known business profile
• Structuring (deposits kept below $10,000 reporting threshold)
• Reluctance to explain source of funds
• Request to establish a new entity to receive the funds

GFS Example 2: Real Estate Agent — Overpriced Purchase

Transaction details On 5 February 2026, an offer of $1,450,000 was made on a property at 42 Example Street, Suburb VIC 3000. The property was listed at $1,100,000 and comparable recent sales in the area range from $1,050,000 to $1,150,000.

Buyer information The buyer, ABC Holdings Pty Ltd, is a company incorporated 3 weeks prior to the offer. The sole director is Li Wei, a foreign national with a passport address in [Country]. Mr Wei was represented by a third party, James Park, who stated he had "authority to act" but could not produce formal documentation.

Suspicious indicators

• Offer 32% above market value with no negotiation
• Newly incorporated company with no trading history
• Buyer represented by an unauthorised third party
• Funds for the deposit originated from an overseas account with no clear connection to the buyer's stated business
• Buyer showed no interest in inspecting the property

GFS Example 3: Jeweller — Structured Cash Purchases

Customer activity Between 10 and 14 March 2026, a customer identifying herself as Sarah Johnson made four purchases of gold bullion at our store:

• 10 March: $9,200 (cash)
• 11 March: $8,500 (cash)
• 12 March: $9,800 (cash)
• 14 March: $7,500 (cash)

Total: $35,000 in cash over 5 days.

Concerns Each transaction was kept below the $10,000 cash reporting threshold. Ms Johnson stated each purchase was a "gift for a different family member" but all items were identical gold bars. She declined to provide a residential address, offering only a PO Box. The identification provided (driver's licence) showed a different suburb to the PO Box.

Risk indicators

• Apparent structuring to avoid TTR threshold
• Repeat high-value cash purchases in a short period
• Inconsistent explanation for purchases
• Reluctance to provide address information

Step 4: Submit via AUSTRAC Online

1. Log in to AUSTRAC Online
2. Select "Submit a suspicious matter report"
3. Complete all required fields
4. Paste your GFS text into the grounds for suspicion section
5. Attach any supporting documents
6. Submit and save your confirmation number

From 1 July 2026 to 30 March 2029, you can use either the old SMR form or the new form with updated information requirements. Both are accepted.

Step 5: Record and Monitor

After filing:

• Save a copy of the SMR and confirmation number
• Record the filing date in your compliance records
• Continue monitoring the client relationship
• Do NOT tip off the client — this is a criminal offence
• Consider whether to continue providing services to the client

Common SMR Mistakes

What Happens After You File

1. AUSTRAC receives and triages your report
2. Analysts assess the intelligence value
3. The report may be:
   • Combined with other reports about the same individual
   • Referred to law enforcement (AFP, state police)
   • Used to build broader intelligence on criminal networks
   • Filed for future reference

AUSTRAC does not typically inform you of the outcome. Your obligation ends when you file the report — but you should continue monitoring the client.

Tipping Off: What You Must Never Do

Tipping off means telling a client (or anyone else) that an SMR has been or will be filed. This is a criminal offence under Section 123 of the AML/CTF Act.

You cannot:

• Tell the client an SMR was filed
• Tell colleagues who don't need to know
• Warn the client to "be careful" with their transactions
• Delay providing a service as an indirect warning
• Post about it on social media or discuss it publicly

The penalty includes imprisonment. Take this seriously.

Filing Frequency

There's no limit on how many SMRs you can file. AUSTRAC would rather receive 10 unnecessary reports than miss one genuine case.

If you notice ongoing suspicious behaviour from the same client, file a new SMR for each new suspicion — don't assume your first report covered it.

AML Mate includes guided SMR forms that walk you through each field, with pre-filled templates based on your industry. Start your free trial or check your compliance status first.