--- title: "How to File Your First SMR | HeadStart Docs™" description: "Step-by-step guide to filing a Suspicious Matter Report with AUSTRAC. Learn the 24-hour and 3-day rules, what triggers an SMR and how to document your suspicions." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "HeadStart Docs", "legalName": "HeadStart Docs Pty Ltd", "url": "https://www.headstartdocs.com.au", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png?v=4", "width": 512, "height": 512 }, "description": "AML/CTF compliance digital products and programs for Australian businesses under Tranche 2 regulations. Free program documents and AML Portal. 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All reporting entities in designated sectors including lawyers, accountants, real estate agents, conveyancers, and trust and company service providers must have their AML/CTF programs in place by this date." } } ] }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "How to File SMR", "item": "https://www.headstartdocs.com.au/tranche-2-resources/how-to-file-smr" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "How to File Your First Suspicious Matter Report (SMR)", "description": "Step-by-step filing a Suspicious Matter Report with AUSTRAC. Learn the 24-hour and 3-day rules, what triggers an SMR and how to document your suspicions correctly.", "datePublished": "2025-12-20", "dateModified": "2025-02-04", "url": "https://www.headstartdocs.com.au/tranche-2-resources/how-to-file-smr", "image": "https://www.headstartdocs.com.au/logo-512.png", "inLanguage": "en-AU", "isPartOf": { "@type": "WebSite", "name": "HeadStart Docs", "url": "https://www.headstartdocs.com.au" }, "about": { "@type": "Thing", "name": "AML/CTF Compliance", "description": "Anti-Money Laundering and Counter-Terrorism Financing compliance for Australian businesses under Tranche 2" }, "author": { "@type": "Organization", "name": "HeadStart Docs" }, "publisher": { "@type": "Organization", "name": "HeadStart Docs", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png" } } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "How to File SMR", "item": "https://www.headstartdocs.com.au/tranche-2-resources/how-to-file-smr" } ] } ] --- [Get Started ](/checkout) We use cookies to enhance your experience and analyse traffic. [Privacy Policy](/privacy) Essential OnlyAccept All [Skip to main content](#main-content) [ ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) ](/) [Home ](/) Features [Programs ](/programs) Resources Sectors [Log in ](/auth) [Portal](/aml-landing) 1. [](/) - [Free Resources](/tranche-2-resources) - How to File SMR ![Filing suspicious matter report](/assets/aml-compliance-meeting-_5wdVU3m.jpg) [Back to Free Resources](/tranche-2-resources) Updated February 2025 • SMR Filing # How to File Your First Suspicious Matter Report (SMR) Filing a Suspicious Matter Report is one of the most critical obligations under the AML/CTF Act. Get it wrong and you face penalties. Get it right and you are protected. Here is exactly how to do it. ## What is a Suspicious Matter Report? A Suspicious Matter Report (SMR) is a confidential report you must file with AUSTRAC when you form a suspicion about a client or transaction. Under **Section 41** of the AML/CTF Act, reporting entities must report suspicious matters within strict [timeframes](/tranche-2-resources/smr-reporting-timeframes). ## The two timeframes: 24 hours vs 3 business days #### 24-Hour Rule You must report within 24 hours if the matter relates to terrorism financing or the physical safety of a person. Section 41(2) - Urgent reporting obligation #### 3 Business Days All other suspicious matters must be reported within 3 business days of forming the suspicion. Section 41(1) - Standard reporting obligation ## What triggers an SMR? You must file an SMR if you suspect on reasonable grounds that: - The client is not who they claim to be - The transaction involves money laundering - The transaction involves terrorism financing - Information given to you may be relevant to tax evasion - The transaction has no apparent lawful purpose - The client is attempting to structure transactions ### Key point: "Suspicion" not "proof" You do not need to prove anything. If you have a suspicion based on reasonable grounds, you must report. AUSTRAC investigates - not you. ## Step-by-step: Filing your first SMR 1. **Document the suspicion internally:** Record when you formed the suspicion, what triggered it and the relevant transaction or client details. 2. **Determine the timeframe:** Is this a 24-hour matter (terrorism/safety) or 3-day matter? 3. **Access AUSTRAC Online:** Log in to your AUSTRAC Online account. If you do not have one, you must set this up as part of your enrolment. 4. **Complete the SMR form:** Provide details about the suspicious matter, client identification, transaction details and your reasons for suspicion. 5. **Submit and retain confirmation:** Keep the AUSTRAC reference number and a copy for your [records (7 years)](/tranche-2-resources/record-keeping-requirements). ## What NOT to do - **Do NOT tell the client:** "[Tipping off](/tranche-2-resources/tipping-off-safe-harbor)" is a criminal offence under Section 123 - **Do NOT delay:** Missing the deadline attracts civil penalties - **Do NOT over-investigate:** You are not a detective - report the suspicion and let AUSTRAC investigate - **Do NOT discuss with colleagues unnecessarily:** Keep it confidential to those who need to know ## Protection for reporters Under **Section 121**, you are protected from liability when making an SMR in good faith. You cannot be sued for breach of confidentiality or defamation for filing a report. ## Legal professional privilege and SMRs For lawyers, the interaction between SMR obligations and legal professional privilege (LPP) requires careful navigation. Under **Section 242** of the AML/CTF Act, privileged information is generally protected from disclosure. However, this protection is not absolute. LPP does **not** apply where: - The communication was made for an improper purpose (e.g. to facilitate fraud or crime) - The lawyer is providing a designated service outside of litigation (e.g. conveyancing, trust administration) - The information relates to the client's identity or the nature of the transaction itself ### The "crime-fraud" exception If you suspect your client is using your services to further a crime or fraud, privilege does not attach to those communications. You may still be required to file an SMR. When in doubt, seek independent legal advice before deciding not to report. Practically, this means lawyers providing designated services under Tranche 2 (such as real estate transactions, trust services or company formation) will often find that LPP does not apply to the suspicious matter. The safer approach is to assume the reporting obligation applies unless you have clear advice otherwise. Note that where LPP applies and you claim it, you must still submit an LPP Form to AUSTRAC within the required timeframe (24 hours for terrorism financing matters or 5 business days for other ML/TF/PF matters). The LPP Form is submitted in addition to the SMR, not instead of it. ### Key Takeaway Filing an SMR is your legal obligation and protects your business. Document the suspicion, report within the timeframe (24 hours or 3 days) and never tip off the client. When in doubt, report. [View AML/CTF Digital Products](/programs) [ Read our complete Tranche 2 Guide Key dates, affected sectors, obligations and how to prepare ](/tranche-2) **Disclaimer:** This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services. We do not guarantee the accuracy of information provided. Obligations may apply depending on your designated services. Always confirm your specific requirements with a qualified adviser. Need a lawyer to review your AML/CTF program? [HeadStart Counsel](https://headstartcounsel.com.au/get-started) offers fixed-fee tailoring from $1,800+GST. 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