Trustees of superannuation funds have reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) when they accept a contribution, rollover or transfer in relation to a member, or cash an interest held by a member. The submission of SMRs to AUSTRAC is a critical obligation under the Act.
AUSTRAC analysed two years of SMRs submitted by the sector through to the end of February 2016.
AUSTRAC and its partner agencies piece together intelligence from a range of sources to develop a picture of criminal activities and networks. Many partner agencies – including the Australian Federal Police, Australian Crime Commission and Australian Taxation Office (ATO) – have access to AUSTRAC SMRs, and approximately 30 per cent of SMRs submitted by the sector over a two-year period were referred to, or requested by, partner agencies for further analysis and investigation.
SMRs submitted by superannuation fund trustees
1 March 2014 to 29 February 2016
- 294 SMRs submitted
- $22.3 million in total value
- 49 superannuation fund trustees submitted at least 1 SMR
- 5 superannuation fund trustees submitted half of the total SMRs
Common misconceptions about suspicious matter reporting
Some superannuation funds may believe that submitting an SMR could lead to criticism that the fund has done something wrong or has weak controls. This is not correct and in fact, reporting SMRs is viewed by AUSTRAC as evidence that a fund is likely to have effective AML/CTF systems and controls. Given the size of superannuation holdings and the level of criminal activity in the sector, it is likely that all funds would be exposed to potential suspicious matters. Low levels of reporting compared to industry peers may be an indicator of an ineffective AML/CTF program.
A second misconception is that funds should not submit an SMR unless they have complete and comprehensive details of the suspected criminal activity. This is not the case.
A partially completed SMR from one fund can be linked to other SMRs and other intelligence sources, helping AUSTRAC build more comprehensive financial intelligence. The reporting requirements and templates are designed to accommodate reportable matters that may not necessarily involve the complete knowledge of a matter.
A third misconception is that superannuation fund trustees should only report suspicions directly relating to transactions associated with ML/TF. Again, this is not the case. Superannuation fund trustees should also report suspicious matters associated with a range of financial criminal activity and predicate offences, including fraud, corruption and tax evasion.
Further information about SMRs can be found in the AUSTRAC compliance guide.