Threshold transaction reports (TTRs)

Contents


What are the threshold transaction reporting obligations?

Reporting entities must submit a TTR to AUSTRAC within 10 business days after the entity provides a customer with a designated service involving a 'threshold transaction'. Threshold transactions involve the transfer of physical currency or e-currency of AUD10,000 or more (or foreign currency equivalent). For example, depositing physical currency of AUD10,000 or more into a person's account is a threshold transaction.

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What details must be reported in a TTR?

Chapter 19 of the AML/CTF Rules specifies the details which reporting entities must report to AUSTRAC in a TTR. These details include:

  • the business details of the reporting entity
  • the customer of the designated service
  • the individual conducting the transaction (if different from the customer)
  • the recipient of the proceeds of the transaction (if different from the customer)
  • details of the transaction, including cash and other components.

Further information about the details that must be reported in a TTR is available in AUSTRAC's Guide to making a Threshold Transaction Report. AUSTRAC has produced four TTR guides, covering money services businesses, investment and superannuation businesses, gambling services, and financial and bullion services. These guides are available to reporting entities through AUSTRAC Online or by contacting the AUSTRAC Help Desk.

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What information must be reported when the individual conducting the transaction is not the customer of the designated service?

Reporting entities must include in a TTR the details of the individual conducting a threshold transaction where that individual is not the customer of the designated service. This requirement applies in the following circumstances:

  • where the individual is not the customer;
  • where the individual is an employee acting on behalf of the customer; for example, in circumstances where the individual may be depositing takings on behalf of the customer's business; and
  • where the individual is conducting the transaction on behalf of a non-individual entity (such as a cash carrier or courier business) which is not the customer.

A reporting entity must disclose in a TTR:

  • if an individual conducted the transaction; and
  • if the individual that conducted the transaction is not the customer of the designated service, the details of that individual and any business they represent in accordance with Chapter 19 of the AML/CTF Rules.

In some situations, the reporting entity is not required to report the details of the individual representing the customer. This applies where:

  • the transaction involves a deposit which was not carried out 'face-to-face' (for example, through the use of an automated teller machine or night or express deposit facility), or
  • the individual carries out a transaction relevant to the item 51 (collecting physical currency) or item 53 (delivering physical currency) designated services; that is, where the individual is acting on behalf of a business such as a cash carrier.

Where these circumstances apply, the reporting entity must supply AUSTRAC with a statement stating that one of the above two situations apply, in addition to the customer details.

If a reporting entity does not know whether the customer or an individual acting on behalf of the customer carried out the transaction, the reporting entity must assume that the transaction was carried out by the customer and supply details accordingly.

Determining whether the individual conducting the threshold transaction is the customer of a designated service

Determining the customer of a transaction will depend on the facts available to the reporting entity and the type of designated service provided. AUSTRAC expects reporting entities to carefully examine each threshold transaction to determine whether the individual conducting the transaction is the customer of the designated service (for example, is the individual conducting the transaction the account holder?).

It is reasonable for a reporting entity to accept that the individual conducting the transaction is the customer and collect the required customer identification information from that individual where the reporting entity has no reason to believe the individual is not the customer - for example, where:

  • the individual has not told the reporting entity that they are not the customer; and
  • the reporting entity is not aware, through other information reasonably available to it, that the individual is not the customer.

The following list includes examples of information that a reporting entity may use to decide whether or not the individual conducting the threshold transaction is the customer of the designated service:

  • the account is held in the name of a business or company
  • reporting entity staff notice a difference between the physical appearance of the individual conducting the transaction and the personal details of the account holder (for example, an obvious difference in age or gender)
  • the transaction is not consistent with the known financial profile or previous activity of the customer
  • the transaction is undertaken at a location not normally associated with the customer (for example, a deposit being made interstate).

Collecting 'if known' reportable details about the individual conducting a threshold transaction (where the individual is not the customer of the designated service)

Reporting entities must include certain prescribed information in transaction reports, if that information is known to the reporting entity. 'If known' can mean 'if known or reasonably accessible to a reporting entity'. This is in addition to the mandatory information which must be included in transaction reports.

A reporting entity should endeavour to collect 'if known' reportable details about the individual. Examples include:

  • telephone number
  • Australian Business Number (ABN)
  • Australian Company Number (ACN)
  • Australian Registered Body Number (ARBN).

A reporting entity can rely on information previously collected from an individual conducting a transaction.

Identifying a customer who is not present at the time of the threshold transaction (where the individual conducting the transaction is not the customer of the designated service)

In circumstances where it has been determined that the individual conducting the threshold transaction is not the customer of the designated service, it may be that the customer is not present at the time of the transaction (for example, a person carrying out a transaction on behalf of a family member or a friend that is not present). Further, it may be that the customer is not known to the reporting entity (that is, there is no pre-existing relationship between the reporting entity and the customer has not been identified previously).

In these circumstances, a reporting entity may consider collecting the required customer identification information from the individual conducting the transaction and verify the information prior to the designated service being provided. In circumstances where the required customer information cannot be collected the reporting entity may decide not to provide the designated service.

Where pre-existing customer information is available to the reporting entity, a reporting entity may rely upon that information to satisfy the identification requirements prior to the designated service being provided.

The individual conducting the threshold transaction is a politically exposed person

If the customer of a designated service is a foreign politically exposed person (PEP), an immediate family member or a close associate of the foreign PEP, reporting entities must undertake the customer identification requirements specified in Chapter 4 of the AML/CTF Rules and the enhanced customer due diligence requirements in Chapter 15 of the AML/CTF Rules.

These requirements relate to the identification of the customer if the individual has not previously been identified (Chapter 4 of the AML/CTF Rules) and, in circumstances where they have previously been identified (such as when opening an account), the application of the enhanced customer due diligence measures specified in Chapter 15 of the AML/CTF Rules.

These measures may also be applied to domestic PEPs if the reporting entity assesses them to be of a high ML/TF risk.

The enhanced customer due diligence measures include requiring reporting entities to consider whether particular transactions should be processed and whether existing customer identification information should be updated or re-verified.

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What are the reporting obligations when the threshold transaction involves an account with multiple signatories?

Reporting entities are only required to report in a TTR the details of the signatory conducting the threshold transaction who is not the account holder (that is, the person at the counter). This requirement recognises that some accounts (such as corporate accounts) may have many signatories and therefore it is impractical for a reporting entity to collect the transaction details of all these individuals.

However, information on any other signatory to the account is reportable if AUSTRAC requests this information from a reporting entity.

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What are the reporting obligations when a customer deposits physical currency of AUD10,000 or more (or foreign currency equivalent) directly into the reporting entity's bank account?

A situation may arise where a customer will deposit physical currency of AUD10,000 or more directly into the reporting entity's bank account, rather than providing physical currency over-the-counter to a reporting entity. These deposits must be reported by the account provider only (that is, the financial institution that accepts the physical currency), regardless of whether the reporting entity then uses those funds to provide a designated service in a separate transaction.

Example

A customer deposits AUD20,000 cash directly into a bank account held in the name of a stockbroker. The stockbroker uses the deposited funds to purchase securities on behalf of the customer. No physical currency is handled by the stockbroker or its agents.

In this example, there are two designated services provided in two separate transactions:

  • By accepting the AUD20,000 cash deposit, the stockbroker's bank provides the 'account deposit' service (designated service item 3). This transaction involves the transfer of an amount of physical currency that must be reported to AUSTRAC; therefore, the bank must submit a TTR to AUSTRAC.
  • By purchasing securities on behalf of the customer, the stockbroker provides the service of 'acquiring securities for a person' (designated service item 33). This transaction does not involve transferring physical currency. Therefore, purchasing the securities is not reportable to AUSTRAC and the stockbroker does not have to submit a TTR. However, if the stockbroker (or its agent) handled AUD10,000 or more of physical currency while providing a designated service (for example, paying for securities using physical currency), the stockbroker would have to report the threshold transaction to AUSTRAC in a TTR.

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When should a customer's transactions be combined and reported in a single TTR?

A TTR obligation arises when a single transaction involves physical currency of AUD10,000 or more (or foreign currency equivalent). Often, a reporting entity may provide a series of services (for example, cash withdrawals or account deposits) to a customer which, when combined, amount to AUD10,000 or more (or foreign currency equivalent).

A reporting entity must decide whether providing a series of services constitutes a single transaction or a number of separate transactions. The decision will largely depend on the circumstances in each case. In general, a series of services can be considered a single transaction where the services share the same characteristics and purpose and are continuous. Some examples are provided below.

Example 1: Reporting more than one cash transaction in a single TTR

Mr K visits ABC Bank and specifically asks to make two cash deposits of AUD7,000 each into the same account. Mr K makes this request because he wants two line items in his bank statement for bookkeeping purposes.

In this example, ABC Bank provided one designated service (transferring physical currency of AUD14,000) to one customer, and therefore, ABC Bank must report the transaction to AUSTRAC as a single TTR with a value of AUD14,000.

Example 2: Reporting cash transactions in a separate TTR

Mr V visits his financial institution and hands over AUD25,000 cash. He asks that AUD13,000 be deposited into his bank account, and AUD12,000 be used to purchase a foreign currency.

In this example, Mr V received two different designated services and, therefore, two transactions occurred (that is, a AUD13,000 cash deposit, and a AUD12,000 purchase of foreign currency). Each transaction involved transferring AUD10,000 or more, so the financial institution must report both transactions to AUSTRAC in two separate TTRs.

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What are the TTR obligations for cash carriers?

Where a cash carrier collects physical currency of AUD10,000 or more from a customer, the cash carrier must submit a TTR to AUSTRAC (except in the circumstances detailed below). A reportable threshold transaction is not necessarily a single cash collection - one transaction may involve a series of events occurring over a period of time. A TTR must be submitted to AUSTRAC within 10 business days once the threshold is reached. The report should include details of the separate cash collections that comprise the transaction.

  • Does the series of cash collections relate to a different customer?
  • Does the series of cash collections occur at multiple points within the same site or location (for example, multiple car parks across the city)?
  • Does the series of cash collections occur over a period of time (for example, on separate days, or at different times on the same day)?

Example

A cash carrier travels to the ABC Shopping Centre car park at 10 am and empties the pay stations from each floor of the 10-storey car park. The cash carrier also collects cash from a number of retail shops on each floor in the shopping centre. The cash carrier then travels to the XYZ Shopping Centre and collects cash from the car park and retail shops. The car park and some of the retail shops at the XYZ Shopping Centre are operated by the same company as the ABC Shopping Centre. At 5pm, the cash carrier returns to the ABC Shopping Centre to empty the car park pay stations on various floors of the car park.

In this example:

  • The cash collected from each pay station at the ABC Shopping Centre during the morning collection is a single transaction and should be combined.
  • The cash collected from the retail outlets at the ABC Shopping Centre relates to separate customers and should not be combined with the cash collected from the pay stations and the cash collected from the retail shops at the XYZ Shopping Centre.
  • The collection of cash from each pay station at the XYZ Shopping Centre is a single transaction and should not be combined with the cash collected from the pay stations at the ABC Shopping Centre because the collections occurred at separate locations.
  • The pay station cash collected at 5 pm from the ABC Shopping Centre should not be combined with the pay station cash collected from the ABC Shopping Centre at 10 am, because the collections occurred at different times.

Information to be supplied by a cash carrier in certain circumstances

If a reporting entity such as a cash carrier provides the item 51 (collecting physical currency) or item 53 (delivering physical currency) designated services, they do not need to collect the details of the individual staff member representing the customer (the actual persons they are delivering physical currency to or collecting from) if the provision of the collection or delivery service occurs under an agreement which requires that the service must be scheduled five business days or more in advance.

This means a cash carrier is not required to collect the details of their customer's staff members every time they pick up or deliver physical currency of AUD10,000 or more.

In these circumstances, the reporting entity must supply AUSTRAC with a statement to the effect that the transaction was carried out as specified in Chapter 19 of the AML/CTF Rules. The reporting entity must still supply the customer details, but not the details of the customer's individual staff members. If the reporting entity is unable to determine whether the individual who is being provided with the service is the customer or an agent of the customer, the reporting entity can assume that the transaction was provided to the customer.

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When must a reporting entity provide further information about a TTR?

AUSTRAC (and officials from certain AUSTRAC partner agencies in certain circumstances) can issue a written notice to a reporting entity (or any other person), requiring it to produce further information about a TTR submitted to AUSTRAC. This further information may be information the entity has about the customer or a particular transaction that can assist in an investigation (for example, account information, customer details or a statement of transactions).

A reporting entity failing to comply with such a notice may incur a civil penalty.

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What are the penalties for failing to report a TTR?

If a TTR is submitted after the reporting period of 10 business days, or not submitted at all, AUSTRAC can apply to the Federal Court of Australia for a civil penalty order of up to 100,000 penalty units for a body corporate, and up to 20,000 penalty units for a person other than a body corporate.

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Are there any exemptions from the obligation to report a TTR?

Exemptions from the obligation to report a TTR apply:

  • where designated services are provided at or through a reporting entity's permanent establishment in a foreign country
  • where a reporting entity holds an Australian financial services licence (AFSL) and only 'arranges for' a person to receive a designated financial service.

Further, the TTR obligations do not apply when the designated service involving a threshold transaction is:

  • provided by an authorised deposit-taking institution (ADI) to a customer that is an ADI
  • provided by the Reserve Bank of Australia to a customer that holds an Exchange Settlement Account
  • provided by an Exchange Settlement Account holder to a customer that holds an Exchange Settlement Account
  • one of the designated services described in item 51 and 53 (table 1, section 6 of the AML/CTF Act, (cash carrying services) and relates wholly to one or more of the following:
    • a transaction between one ADI and another ADI
    • a transaction between an Australian Government Entity and an ADI with which it holds an account
    • a transaction between one Australian Government Entity and another
    • an intra-Australian Government Eentity transaction
    • an intra-ADI transaction.

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What is structuring?

'Structuring' is a money laundering technique involving the deliberate splitting of transactions into smaller amounts in order to avoid TTR requirements. It is an offence to conduct transactions designed to avoiding threshold transaction reporting requirements.

The penalty for structuring is imprisonment for up to five years, or a fine of up to 1,500 penalty units (for a corporation) or 300 penalty units (for an individual).

If it is suspected on reasonable grounds that the customer is structuring or attempting to structure their transactions, the reporting entity must submit a suspicious matter report (SMR) to AUSTRAC.

Example

Ms R visits her financial institution and deposits AUD4,000 cash into her account. The next day, she returns to the financial institution and purchases a bank cheque with AUD6,500 cash and deposits another AUD9,000 cash into her account. After reviewing Ms R's previous transactions and her known sources of income (she is unemployed) the financial institution suspects she is structuring her transactions to avoid the TTR requirements.

The financial institution submits an SMR to AUSTRAC.

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Is a registered affiliate of a remittance network provider required to submit TTRs?

No. The remittance network provider is responsible for reporting TTRs on behalf of its affiliates where the reportable transaction uses the network provided by the remittance network provider.

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Additional information

  1. More information on completing TTRs is available on AUSTRAC Online or by contacting the AUSTRAC Contact Centre.
  2. See also the AUSTRAC Public Legal Interpretation No. 7 - Significant cash transactions and threshold transaction reports.

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Last modified: 20/08/2015 13:55