What is a Reporting Entity?
A reporting entity is an individual or business providing designated services under the AML/CTF Act. Your status as a reporting entity depends on the services you provide, not your business size or structure.
Reporting entities must enrol with AUSTRAC, implement an AML/CTF Program, conduct customer due diligence, submit required reports, conduct regular independent reviews of their AML/CTF Program, and maintain appropriate records.
Reporting Entities and Obligations
As a Tranche 2 entity, understanding who qualifies as a reporting entity and what must be reported to AUSTRAC is fundamental to your compliance framework.
To determine if you will be a reporting entity: Check if you'll be regulated | AUSTRAC
Who are Tranche 2 Entities?
Tranche 2 reforms extend AML/CTF obligations to professionals providing higher-risk designated services, including lawyers, accountants, corporate services firms, and real estate agents.
Designated services include:
Lawyers and legal practitioners:
Buying or selling real estate
Managing client money, property, or securities
Managing bank, savings, or securities accounts
Organizing contributions for company formation or operation
Creating, operating, or managing legal persons or arrangements
Conveyancers:
Conducting settlement services for real estate transactions
Accountants:
Preparing or carrying out transactions concerning buying/selling real estate or business entities
Managing client money, property, or securities
Managing bank, savings, or securities accounts
Organizing contributions for creating, operating, or managing legal persons or arrangements
Real estate agents:
Facilitating real property transactions
Trust and Company Service Providers (TCSPs):
Forming companies or other legal persons
Acting as or arranging for another person to act as director, secretary, or partner
Providing registered office, business address, or accommodation services
Acting or arranging for another person to act as trustee
Acting or arranging for another person to act as nominee shareholder
The designation applies only when providing these specific services.
For a detailed list of regulated services: New industries and services to be regulated | AUSTRAC
What is a Suspicious Matter Report (SMR)?
A Suspicious Matter Report (SMR) must be submitted to AUSTRAC when you form a reasonable suspicion that a matter may be related to money laundering, terrorism financing, or another serious crime.
When to report: Submit SMRs as soon as practicable:
Within 24 hours if related to terrorism financing
Within three business days for other suspicions
Indicators of suspicious activity may include:
Unusual transaction patterns
Information inconsistencies
Attempts to avoid reporting thresholds
Customer evasiveness or reluctance to provide information
Transactions lacking economic sense or legitimate purpose
Complex transactions with no apparent business rationale
Transactions involving high-risk jurisdictions
Important: Do not seek further information where this would "tip off" the customer.
For more information: Suspicious Matter Reports | AUSTRAC
What is a Threshold Transaction Report (TTR)?
Threshold Transaction: A transaction involving physical currency (cash) of AUD $10,000 or more, or the foreign currency equivalent. This includes multiple related cash transactions totaling $10,000 or more.
Threshold Transaction Report (TTR): Must be submitted to AUSTRAC within 10 business days after each threshold transaction, regardless of whether it appears suspicious.
Most Tranche 2 entities have limited cash exposure and therefore minimal TTR obligations.
For more information: Threshold Transaction Reports | AUSTRAC
What is a Business-Wide Risk Assessment (BWRA)?
Before implementing your AML/CTF Program, you must conduct a Business-Wide Risk Assessment (BWRA) to identify the specific ML/TF/PF risks your business faces. This assessment examines your customer types, services provided, delivery methods, and foreign jurisdictions involved. The BWRA forms the foundation of your entire compliance framework and cannot be outsourced.
What Needs to be Reported?
Reporting entities enrolled with AUSTRAC have several key reporting obligations:
Suspicious Matter Reports (SMRs)
Report any transaction or activity that raises suspicion of money laundering, terrorism financing, or other criminal activity.
When: Within 24 hours if related to terrorism financing, or within three business days for other suspicions.
Threshold Transaction Reports (TTRs)
Report transactions involving physical currency of AUD $10,000 or more (or the foreign currency equivalent).
When: Within 10 business days after the transaction.
International Funds Transfer Instructions (IFTIs)
Report instructions for transferring funds into or out of Australia, regardless of the amount (limited applicability for most Tranche 2 entities).
When: Within 10 business days after the transfer instruction is sent or received.
AUSTRAC Compliance Reports
Periodically report on how your entity is meeting its AML/CTF obligations.
When: As required by AUSTRAC.
Cross-Border Movement (CBM) Reports
Report the movement of physical currency of AUD $10,000 or more (or the foreign currency equivalent) into or out of Australia (limited applicability for most Tranche 2 entities).
When: Before sending or carrying cash out of Australia, or within five business days of receiving cash from overseas.
These reporting obligations help AUSTRAC detect, deter, and disrupt financial crimes.
For comprehensive information:
Disclaimer: This document provides general information and is not legal advice. Consult legal advisors and AUSTRAC guidance when developing your compliance framework.
Visit: www.austrac.gov.au