--- title: "Tipping Off Safe Harbour 2026 | HeadStart Docs™" description: "Section 123(4) creates a Crime Prevention Exception letting advisors dissuade clients from criminal conduct without breaching tipping off rules." 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": "Tipping Off Safe Harbor", "item": "https://www.headstartdocs.com.au/tranche-2-resources/tipping-off-safe-harbor" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "Tipping Off 2026: The New Safe Harbor for Advisors", "description": "Section 123(4) introduces a Crime Prevention Exception allowing advisors to dissuade clients from criminal conduct. Learn how to use this safely.", "datePublished": "2025-12-20", "dateModified": "2025-02-04", "url": "https://www.headstartdocs.com.au/tranche-2-resources/tipping-off-safe-harbor", "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" } } } ] --- [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) ![Legal advisor consultation](/assets/adelaide-lawyer-BRfiVKYd.jpg) [Back to Free Resources](/tranche-2-resources) Updated February 2025 • Legal Compliance # Tipping Off 2026: The New "Safe Harbour" for Advisors Designated service providers will face an impossible situation: if they suspect a client is engaging in money laundering, they cannot tell the client about a [suspicious transaction report](/tranche-2-resources/how-to-file-smr). But what if they want to persuade the client to stop before any service is being provided? Section 123(4) provides a pathway. ## The fear: Tipping off penalties Under the AML/CTF Act, it is a criminal offence to disclose ("tip off") to a customer that: - A Suspicious Matter Report (SMR) has been made about them - An SMR is being considered - Information has been provided to AUSTRAC ### Tipping Off Penalty The penalty for tipping off is **imprisonment**. This creates significant anxiety for professional advisors who may want to counsel a client away from suspicious conduct. **Note:** Individual officers, employees and agents are personally liable for tipping-off offences. This liability continues even after employment ends. ## The update: Section 123(4) Crime Prevention Exception The reformed legislation introduces a critical exception under **Section 123(4)**. This provision creates a "safe harbour" for disclosures made for the purpose of crime prevention. ### Section 123(4): Crime Prevention Exception The tipping off prohibition does not apply to a disclosure made: > "for the purposes of dissuading the customer from engaging in conduct that constitutes an offence against a law of the Commonwealth, a State or a Territory." ## What this means for advisors In practical terms, this exception allows lawyers and accountants to: #### Counsel clients about legal risks You can advise a client that their proposed conduct may constitute a criminal offence and recommend they do not proceed. #### Explain consequences You can explain the potential legal consequences of money laundering, terrorism financing or other criminal conduct. #### What you cannot do You still cannot disclose that you have made, or intend to make, an SMR. The exception covers crime prevention advice, not disclosure of your reporting activity. ## A practical example Consider this scenario: ### Scenario: The suspicious property purchase A client instructs you to assist with a property purchase. The funds are coming from multiple overseas sources with no clear explanation. You suspect money laundering. #### What you cannot say: "I have reported this transaction to AUSTRAC" or "I am considering making a suspicious matter report." #### What you can say (under Section 123(4)): "The structure of this transaction raises concerns. Using funds from unexplained overseas sources for property purchases can constitute money laundering under Australian law. The penalties include imprisonment. I strongly advise you to reconsider this approach and ensure all funds have a legitimate, documented source." ## How to use this exception safely 1. **Focus on dissuasion:** Your conversation must be aimed at persuading the client not to engage in criminal conduct. Document this purpose. 2. **Avoid disclosing reporting:** Never mention SMRs, AUSTRAC reports or your internal suspicions. Focus on explaining the law and consequences. 3. **Document the conversation:** Keep a file note of what you said, when and why. Record that the purpose was crime prevention. 4. **Seek legal advice:** If uncertain, consult your professional indemnity insurer or a criminal law practitioner before having the conversation. ## The limits of the exception The Section 123(4) exception is narrowly drafted. It does not cover: - Disclosing that you have made an SMR - Warning a client that they are under investigation - Helping a client avoid detection or destroy evidence - General gossip or speculation about law enforcement activity ### Key Takeaway Section 123(4) creates a "safe harbour" allowing advisors to counsel clients away from criminal conduct without committing a tipping off offence. You can explain the law and its consequences. You cannot disclose your reporting activity or internal suspicions. Document your conversations and focus on crime prevention, not report disclosure. [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. Separate entity and engagement. ### Related Articles [ Reporting How to File Your First SMR ](/tranche-2-resources/how-to-file-smr)[ Reporting SMR Reporting Timeframes ](/tranche-2-resources/smr-reporting-timeframes)[ Red Flags Trust Account Red Flags ](/tranche-2-resources/trust-account-red-flags)[ Law Practices Law Practices and Tranche 2 ](/tranche-2-resources/law-practices-tranche-2) ### Free Compliance Tools [Implementation Timeline Key dates and milestones for Tranche 2 compliance ](/timeline)[Readiness Test Assess your compliance readiness in 2 minutes ](/risk-calculator)[Sanctions Screening Search Australian sanctions lists and country risk ](/sanctions-search) ### Ready to get compliant? 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