When to report a suspicious matter?

Step 1: Has your client or transaction shown any red flags that have raised suspicion?

• NO: No SMR required. (Document why you felt the transaction was normal if it was flagged by easyAML). Continue monitoring.
  
  
• YES: Proceed to Step 2. Refer to the Red Flag Checklist below to help you answer:

Behavioural Indicators

Do you have a gut feeling like something isn’t quite right?

• Secretive or Evasive: The client refuses to provide information, offers vague details, or avoids face-to-face meetings without a valid reason.
• Inconsistent Profile: The client’s known income, age, or occupation does not match the value of the assets they are buying or the complexity of the services they are requesting.
• Reluctance to ID: The client acts defensive when asked for standard identification documents or delays providing them.
• Unusual Urgency: The client pressures you to complete the transaction immediately, often asking you to cut corners on due diligence.
• Acting as a "Front": The client appears to be taking instructions from someone else (a "silent partner") who is not present or named in the paperwork.
• Fake or Tampered documents: The ID documents provided look photocopied, poor quality, or digitally altered.

Financial Indicators

These triggers usually appear when you ask, "Where is the money coming from?"

• Unexplained Wealth: The client cannot or will not clearly explain the origin of their funds.
• Unusual Payment Methods: The client attempts to pay a large deposit using physical cash, crypto assets, or a third-party cheque.
• Third-Party Funding: The funds are coming from a person or entity unrelated to the person involved in the transaction.
• High-Risk Jurisdictions: Funds are flowing from or to a country known for weak anti-money laundering laws or high corruption risk.
• Private Lending: The client uses undocumented private loans or promissory notes instead of standard bank financing.

Transactional Indicators

These triggers appear when you look at the structure of the deal itself.

• No Economic Sense: The transaction results in a loss, or the property is being bought/sold at a price significantly different from market value.
• Structuring: The client asks to split a payment into smaller amounts (e.g three payments of $9,000) specifically to avoid the $10,000 cash reporting threshold.
• Flipping: A property or asset is bought and resold in a very short period for no clear profit motive.
• Buying "Blind": The client purchases a high-value property or asset without inspecting it, particularly if they are offshore.
• Unnecessary Complexity: The client uses a web of trusts, shell companies, or nominee directors for a simple transaction where a direct purchase would be cheaper and easier.
• Trust Account Misuse: The client deposits funds into your trust account and then cancels the transaction, asking for the money to be "refunded" to a different account (treating you like a bank).

Step 2: Is there a lawful or reasonable explanation for this behaviour or does it provide "reasonable grounds" to suspect any of the following?

• The customer is not who they claim to be
• The transaction/service is linked to:
  • Money Laundering (ML)
  • Terrorism Financing (TF)
  • Proceeds of Crime (stolen)
  • Tax Evasion
  • Any other offence against Commonwealth, State, or Territory law

• YES - but there is a lawful explanation: No SMR required. Document why you felt the transaction was normal and if it was flagged by easyAML. Continue monitoring.
• NO - it raises concerns: you suspect that the customer is not who they claim or the designated service relates to: Go to Step 4. If a lawyer, go to Step 3.

Step 3: Privilege Check  (Lawyers Only)

Is the information subject to Legal Professional Privilege (LPP)?

• YES (Fully Privileged): You generally cannot submit this information. LPP is a valid defence for not providing the info. Consult your internal LPP protocols immediately.
• NO (or mixed): If the information is factual (e.g. movement of funds, property details) and not privileged advice, you must report. Proceed to Step 4.

Step 4:  Does the suspicion relate specifically to Terrorism Financing?

• YES: Lodge SMR within 24 HOURS of forming the suspicion.
  
  
• NO: (e.g. suspected tax evasion, money laundering, identity fraud)
  Lodge SMR within 3 BUSINESS DAYS of forming the suspicion.