Suspicious matter reports for lawyers and conveyancers

Red flags

• Funds that do not match the client's known income or business, or explanations that change.
• Requests to structure payments under AU$10,000, or to pay in cash.
• A third party funding or directing the matter for no clear reason.
• Complex structures with no commercial purpose, or a client who will not explain beneficial ownership.
• Instructions to move money through trust unrelated to any legal service.

Privilege

The reforms preserve legal professional privilege. You are not required to disclose privileged communications in a report, and the Act sets out how privilege claims are handled. Where the report involves privileged information, you have five business days instead of three and must lodge AUSTRAC's legal professional privilege form for the information withheld. Privilege does not remove the duty to report a suspicion formed from non-privileged facts.

How to lodge

1. Record the suspicion internally the day it forms.
2. Lodge through AUSTRAC Online within 3 business days (24 hours for terrorism financing).
3. Rate the client high and apply enhanced due diligence, or cease acting.
4. Keep the record for 7 years.

Tipping off

Do not tell the client, or anyone outside the firm, that a report was made or is being considered where that could prejudice an investigation. Discuss it only with your compliance officer and AUSTRAC.