State the trigger and the unresolved concern
Use the current enhanced-CDD requirements and your policies to identify why the case qualifies. Different triggers have different implications; foreign PEP status should not be confused with every domestic PEP. Describe the factual concern rather than using high risk as the whole explanation. For example, an unexplained funding chain, unusual instructions or inconsistent commercial purpose presents different questions from a clear identity record involving a recognised public role.
Choose inquiries that could change the decision
Identify which explanation or corroboration would resolve the concern and which information would increase it. Where source-of-funds or source-of-wealth inquiry is required, distinguish the money for this transaction from the person's broader accumulated wealth. Ask for relevant evidence proportionate to the case. Record the reliability and limits of what is supplied. A bank balance may show money exists without explaining how it was generated or why a third party supplied it.
Give the decision-maker a usable brief
Summarise the service, customer and associated people, trigger, inquiries, evidence, conflicting facts and proposed controls. State any mandatory approval requirement and the authority of the person deciding. Do not treat senior sign-off as permission to disregard sanctions or unmet legal conditions. Specify whether the decision is to proceed with controls, request more information, restrict work or refuse, and why the chosen response addresses the identified risk.
Connect the conclusion to monitoring and reporting
For example, a supported explanation for third-party funding may resolve one concern while requiring monitoring for a later change in payer or transaction purpose. Record that trigger and the person responsible. If reasonable grounds for suspicion have already arisen, do not postpone the reporting decision while waiting for the enhanced review to finish. Where services continue after an SMR obligation arises, apply the relevant enhanced-CDD requirements and protect the reporting material.
Official sources
Use these primary sources to confirm the current rules and apply them to your circumstances.
Sources checked .
Frequently asked questions
Does enhanced CDD always mean refusing the customer?
No. It is a risk-management obligation. The outcome depends on the evidence, applicable law, risk appetite and controls, including whether required matters can be established.
Can a manager approve any unresolved risk?
No. Approval must follow the applicable requirements and cannot override a legal prohibition or substitute for required CDD.
Should an SMR wait for the investigation to finish?
No. Once the reporting threshold is reached, the applicable reporting timeframe runs; further inquiry must not become a reason to miss it.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.