What is a Suspicious Matter Report (SMR)?
A Suspicious Matter Report is a confidential report you file with AUSTRAC when you reasonably suspect that a person or transaction is linked to criminal activity. SMRs generate crucial intelligence that helps law enforcement identify, investigate, and disrupt money laundering, terrorism financing, and other serious crimes.
You must submit an SMR if you have reasonable grounds to suspect that:
- A person is involved in money laundering or terrorism financing
- A transaction relates to criminal activity
- A person is not who they claim to be
- Information you hold may be relevant to the investigation or prosecution of a person for an offence against a Commonwealth, State, or Territory law
- A person is a victim of crime (for example, identity fraud)
You do not need to prove that crime has occurred. A “reasonable suspicion” — based on the facts available to you — is sufficient.
When must you report?
Filing deadlines depend on the nature of the suspicion:
- Within 24 hours — if the suspicion relates to terrorism financing
- Within 3 business days — for all other suspicious matters, including money laundering and other criminal activity
The clock starts when the suspicion is formed — not when the transaction occurred. If you become suspicious about a transaction days or weeks after it happened, you must report within the timeframes above from the moment the suspicion crystallised.
Penalties for not reporting
Failing to submit an SMR within the required timeframe can result in penalties of up to 20,000 penalty units for individuals or 100,000 penalty units for body corporates. AUSTRAC can also require you to provide additional information and impose further fines for non-compliance with such requests.
How to identify suspicious matters
Suspicious activity can take many forms depending on your industry. While no single indicator guarantees criminal activity, the following should prompt further investigation:
Client behaviour
- Client is unusually secretive, evasive, or nervous when asked routine questions
- Client avoids face-to-face meetings or identity verification
- Client appears to be acting on instructions from someone else
- Client ends the relationship when asked for standard compliance information
- Client has an unusual level of knowledge about AML/CTF reporting thresholds
Transaction patterns
- Transactions inconsistent with the client's known business or personal profile
- Large cash payments with no clear source of funds
- Transactions structured to fall just below reporting thresholds (suspected structuring)
- Rapid movement of funds between accounts with no apparent business purpose
- Transactions involving high-risk jurisdictions with no logical connection to the client's business
Identity concerns
- Identity documents appear forged, altered, or in an unexpected format
- Client provides inconsistent personal details across different interactions
- Multiple people share the same address, phone number, or bank account with no apparent relationship
For industry-specific indicators, see our Suspicious Activity Indicators page.
Step-by-step submission process
Step 1: Document the suspicion
Before logging into AUSTRAC Online, gather all relevant facts. Write down why the behaviour or transaction is suspicious in plain English. Include the five W's: who is involved, what happened, when it occurred, where it took place, and why you consider it suspicious.
Step 2: Log into AUSTRAC Online
Access AUSTRAC Online at online.austrac.gov.au. Navigate to the transaction reporting menu.
Step 3: Create the SMR
Select the “+” next to transaction reporting, then choose “create amend reports” and select “SMR.”
Step 4: Complete the required fields
The SMR form requires information about the suspicious person, the transaction (if applicable), and your grounds for suspicion. Key sections include:
- Part C — Suspicious person: Full name, address, date of birth, country of citizenship, occupation, identity verification documents. If you cannot identify the person, provide a physical description and any other details you have.
- Part D — Other parties: If the customer is a victim of crime (for example, identity fraud), place their details here, not in Part C. The actual suspicious person goes in Part C.
- Grounds for suspicion: Write a clear, factual explanation of why you are suspicious. Use plain English with a logical structure. Avoid speculation — stick to what you observed or what the data shows.
Step 5: Review and submit
Check all details for accuracy. A high-quality SMR is clear, concise, complete, and submitted on time. AUSTRAC uses your report to generate intelligence for law enforcement — the better your report, the more useful it is.
Common mistakes to avoid
- Too vague: “Client seemed suspicious” is not enough. Explain what specifically was suspicious — unusual transaction amounts, inconsistent documents, evasive behaviour.
- Missing the deadline: The 24-hour and 3-business-day deadlines are strict. Set up internal procedures to escalate suspicions immediately.
- Confusing victim and suspect: If a customer is a victim of identity fraud, their details go in Part D, not Part C. The person committing the fraud is the suspicious person (Part C).
- Including unverified details in the wrong section: If you have descriptions but not identity details for the suspicious person, don't put them in the free-text field — use Part C with whatever information you have.
- Not filing because you're “not sure”: You don't need certainty. A reasonable suspicion is sufficient. When in doubt, file the report — you are legally protected when reporting in good faith.
Tipping off — a criminal offence
It is a criminal offence to disclose that you have submitted, or are required to submit, an SMR.
This means you must not:
- Tell the client you have filed an SMR about them
- Tell the client you are thinking about filing an SMR
- Warn the client that their behaviour has raised suspicions
- Discuss the SMR with anyone who does not need to know for compliance purposes
You can discuss the SMR with your AML/CTF compliance officer, relevant staff members who need to know for compliance purposes, your legal adviser (in confidence), and AUSTRAC itself.
The tipping-off provisions exist because alerting a suspect could allow them to destroy evidence, flee, or otherwise obstruct an investigation. Take this obligation seriously.
Real case studies
These real-world examples from AUSTRAC demonstrate the impact of SMRs:
- Drug syndicate dismantled: An SMR was key to identifying individuals, financial transactions, and establishing links between syndicate members — leading to two convictions.
- International cybercriminal captured: SMRs identified an offender operating multiple false-name accounts and moving large unexplained cash. The person turned out to be a US-wanted fugitive for cybercrime and fraud.
- Child exploitation disrupted: Financial transaction data combined with SMRs from four reporting entities uncovered suspicious fund flows to high-risk jurisdictions, helping law enforcement target offenders.
- Welfare fraud exposed: SMRs prompted a police investigation into a couple with unexplained wealth, resulting in three arrests, $100,000 in cash seized, and disruption of a drug supply network.
Your SMR — even if it seems minor — can be the piece of intelligence that triggers or supports a major investigation.
How AML Mate helps with SMR reporting
- Smart pre-fill: Client details and transaction history are automatically populated from your existing records
- Step-by-step wizard: Guided SMR form with clear prompts for each section, including grounds for suspicion
- AUSTRAC field validation: Built-in checks catch common errors before you submit
- Deadline tracking: Alerts when an SMR is due, ensuring you never miss the 24-hour or 3-day deadline
- Audit trail: Complete record of all SMRs filed, stored securely for compliance reviews
- Suspicious activity indicators: Industry-specific red flag reference cards to help you identify reportable matters
Frequently asked questions
“What if I file an SMR and it turns out to be nothing?”
You are legally protected when reporting in good faith. AUSTRAC does not penalise businesses for filing SMRs that turn out not to involve criminal activity. It is far better to report and be wrong than to fail to report a genuine suspicion.
“Can I delay filing to gather more information?”
No. The deadline runs from when the suspicion is formed, not from when you have all the facts. File the SMR with the information you have, and you can submit an amended report later if new information comes to light.
“Do I need to stop providing services after filing?”
Not necessarily. Filing an SMR does not automatically mean you must end the client relationship. However, you should consider your ongoing risk and may choose to apply Enhanced Due Diligence. If you are unsure, consult your AML/CTF compliance officer or seek legal advice.
“What if my client asks why I need extra information?”
You can explain that identity verification and information collection are standard regulatory requirements. Do not mention suspicion, SMRs, or AUSTRAC reporting. Simply frame it as a routine compliance process.