Describe the event without an unsupported accusation
Record the customer and relevant service, date, people involved, instructions or transactions observed and supporting records. Separate direct observation, customer explanation and an inference made by staff. Explain what is unusual compared with the known purpose or history. Avoid conclusions about criminal conduct that the evidence does not support. Use a restricted escalation channel and preserve the original source rather than copying sensitive detail into a general task title.
Allocate a prompt assessment and preserve the clock
Identify who will assess the material and the route for urgent escalation or staff absence. Record when reasonable grounds for suspicion are formed, not just when a manager signs a form. AUSTRAC states that certainty of a crime is unnecessary and that an SMR must not wait for enhanced CDD to finish once the reporting threshold is reached. Use the applicable statutory timeframe and any specific legal process, rather than an internal investigation deadline.
Record the decision and the reason
A useful outcome distinguishes no reasonable grounds on the current evidence, continuing inquiry with unresolved concerns and a reporting obligation. Where no report is required, preserve the relevant reasoning so later events can be considered in context. Where a report is required, assign submission responsibility and retain appropriate acknowledgement evidence. An exported draft is not evidence of lodgement, and a second reviewer should not assume the first has submitted it.
Protect communications and continuing work
For example, a customer may ask why new information is needed while staff are reviewing unusual funding instructions. Use an approved, lawful explanation and assess tipping-off restrictions before disclosure. Keep ordinary service communications separate from protected reporting information. If designated services continue, assess the enhanced-CDD and monitoring consequences. Do not assume filing an SMR either authorises every further act or automatically requires the relationship to end; decide the next step under the applicable law and policies.
Official sources
Use these primary sources to confirm the current rules and apply them to your circumstances.
Sources checked .
Frequently asked questions
Does the reporting clock start only after manager approval?
No. Identify when suspicion on reasonable grounds is formed and apply the relevant law. Internal approvals must not be used to postpone the obligation.
Should staff wait until they can prove a crime?
No. The reporting threshold is reasonable grounds for suspicion, not proof beyond doubt. Escalate the facts promptly and assess the applicable grounds.
Can all staff see the escalation and SMR?
Access should follow the legitimate role and applicable protected-information restrictions. Do not place sensitive reporting material in a broadly shared client note.
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.