What is protected
Under section 123 of the AML/CTF Act, a person commits an offence if they disclose information that would or could reasonably be expected to prejudice an investigation, where the information is about a suspicious matter report, a proposed SMR, a request for further information from AUSTRAC, or information that led to such a report or request. The test is objective: it is not enough that the firm meant well or kept the message vague.
Protected information is broader than the words 'we lodged an SMR'. The client's name combined with the timing, the service, the firm's behaviour or the regulatory context can reveal the report. Assess what a reasonable person could infer from the whole communication, including non-verbal signals and follow-up questions.
What a firm can still do
The prohibition does not stop a practice from doing its work. It stops disclosure that could prejudice an investigation. A routine request for a missing source-of-funds document remains lawful and is often exactly what the program requires - provided the request does not reveal the suspicion and is not a sham.
Special care is needed after an SMR is lodged. Refusing a service, closing an account or dramatically changing behaviour can itself communicate the report. Where the program requires an exit or refusal, document the operational reason and follow the same process a practice would follow for an ordinary risk decision.
- Continue ordinary service communications that do not disclose SMR-related information
- Ask genuine customer due diligence questions and collect missing documents
- Lodge the SMR without telling the client, and avoid changing course in an obvious way
- Seek legal advice about the disclosure rules where the position is unclear
Communications that are not tipping off
TTR obligations can generally be explained in ordinary terms because a threshold transaction report is a routine, mechanical report. SMR-related information is different. AUSTRAC's guidance distinguishes the two and warns that any communication revealing the existence of an SMR, or information from which its existence could be inferred, risks the offence where prejudice could reasonably be expected.
Legal professional privilege and the duty to keep client confidences are separate concepts. They do not override the tipping-off prohibition, and the prohibition does not automatically override privilege. Where both regimes could apply, take advice and record the reasoning rather than assuming one discipline satisfies the other.
Controls for the team
The most dangerous tipping-off events are accidental: an email copied to the client, a call from the compliance officer during a meeting, or a staff member mentioning 'the report we lodged'. A restricted suspicious-matter workflow and tested communication guidance reduce that risk.
- Train staff on what protected SMR information is, with worked examples
- Restrict SMR work to the people who need to know, as the program requires
- Use a script or checklist for common client conversations after a report
- Record disclosure decisions and the reasoning, without writing SMR details into ordinary files
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Can we tell the client we lodged an SMR?
Generally no. Disclosing that an SMR was made, or information from which it could reasonably be inferred, can be an offence where disclosure would or could reasonably be expected to prejudice an investigation. Treat SMR-related information as protected.
Is a TTR the same as an SMR for tipping-off purposes?
No. A TTR is a routine report triggered by cash volume and can generally be described in ordinary terms. The tipping-off offence protects SMR-related information; AUSTRAC guidance distinguishes the two report types.
What if the client asks directly whether we reported them?
Do not confirm or deny an SMR in a way that could prejudice an investigation. Redirect to genuine CDD or service matters, and where necessary seek legal advice. Record the interaction without placing protected details in the ordinary file.
Does privilege override tipping off?
No. Legal professional privilege and the tipping-off prohibition operate separately. A privileged communication is not automatically protected from the disclosure offence, and protected SMR information does not automatically lose privilege. Take advice where both regimes apply.
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.