AUSTRAC reporting
Suspicious Matter Reports (SMRs): A Plain-English Guide for Lawyers
26 September 2026 · 4 min read
In brief
A law firm must lodge a suspicious matter report when it forms a suspicion on reasonable grounds about identity, criminal activity or money laundering, terrorism financing or proliferation financing connected with a designated service. Terrorism-financing suspicions are due within 24 hours; other suspicions are due within three business days.
Of the four AUSTRAC report types, the suspicious matter report is the one most law and conveyancing firms are likely to need. It is also AUSTRAC's stated priority: improving the quality of suspicious matter reports is one of its five regulatory priorities for 2026–27.
When you must lodge an SMR
You must submit an SMR if you suspect, on reasonable grounds, that:
- information you hold may be relevant to a crime, including money laundering, terrorism financing, proceeds of crime, tax evasion, or an offence against Commonwealth, State or Territory law
- a customer, prospective customer or their agent isn't who they claim to be
- someone is planning a money laundering, terrorism financing or proliferation financing offence using your designated service
How fast
The clock starts when the suspicion forms, not when the matter closes. A concern raised on Monday afternoon and discussed at next week's partners' meeting is already late.
- Terrorism financing: within 24 hours of forming the suspicion.
- Any other offence: within 3 business days after the day you form the suspicion.
What's new in SMRs
Under the reformed reporting framework, AUSTRAC wants:
- reportable information about the people involved: customers, beneficial owners and counterparties, as far as you hold it
- who formed the suspicion and who completed the report, so AUSTRAC's analysts can contact someone with knowledge of the matter
- other entities involved, so AUSTRAC can connect reports from several businesses about the same activity
The mistakes AUSTRAC sees most
At its September 2026 RegTech session, AUSTRAC listed the most common SMR data-quality problems: 1. unclear grounds for suspicion 2. missing or poorly linked persons and entities 3. transactions reported in the wrong place 4. digital wallet addresses entered in the wrong field
The first one matters most. "Client seemed nervous" is not a ground. "Client asked to pay a $48,000 deposit from three unrelated third-party accounts and declined to explain the source of funds" is.
How Comply.LM helps
- start the deadline clock when a concern is raised - help you set out the grounds for suspicion clearly - link every person and entity involved - check completeness before a compliance officer approves and lodges
Nothing is lodged without a human decision, because the obligation stays with your firm.
General information only, not legal advice. The reforms include protections for legal professional privilege, so get advice on how they apply to your practice.
- Today: Comply.LM holds your verified client identity, beneficial ownership and risk data, which is the foundation of a complete SMR.
- Available in Comply.LM: The guided SMR workflow can:
Authoritative sources
This article draws on current AUSTRAC guidance. Always check the source guidance for updates that apply to your circumstances.
Common questions
How quickly must an SMR be lodged?
Within 24 hours for a terrorism-financing suspicion, or within three business days for other suspicions.
Can a lawyer tell a client that an SMR was lodged?
Generally, disclosing or implying that a suspicion was formed or an SMR lodged can create tipping-off risk. Obtain advice for the specific circumstances, including legal professional privilege.