We have created suspicious activity indicators to help you identify potential money laundering, terrorism financing and other serious criminal activities. These indicators can inform your transaction monitoring alerts that trigger further review.
To complement these indicators, you must also ensure your transaction monitoring systems alert you to unusual, large or complex transactions or patterns of transactions.
If you suspect a not for profit organisation (NPO) customer or a transaction involving your customer is linked to a crime, you must submit a suspicious matter report (SMR) to AUSTRAC within the required timeframe. This includes where you reasonably suspect a person:
- is committing a crime
- is not who they claim to be
- could be the victim of a crime.
On their own, one of these indicators may not suggest suspicious activity. If you are unsure whether there are reasonable grounds for a suspicion, you should conduct further monitoring and examination, including applying enhanced customer due diligence (ECDD) measures. If you have clear and reasonable grounds for a suspicion, you must submit a suspicious matter report (SMR) to AUSTRAC.
For more information on complying with your reporting obligations, see our suspicious matter reporting reference guide and suspicious matter reporting checklist.
This indicators list is not exhaustive. You should consider other indicators specific to your business’s individual risk profile and circumstances.
On this page
Customer identification and behaviour
Customer identification indicators
An NPO customer:
- provides identification information that is false, misleading, vague, or cannot be verified
- uses an unusually complex financial network for its operations
- has opaque beneficial ownership, leadership or decision-making structures
- has sources of income that are unclear and/or confusing
A third party:
- opens an account on behalf of an NPO customer
- uses an account belonging to an NPO customer
Customer behaviour indicators
An NPO customer:
- accepts anonymous donations
- uses cash-intensive businesses in their activities
- allows or has unusually large cash deposits
- uses personal bank accounts to receive donations
- stores funds outside mainstream financial channels
- uses higher-risk channels to transfer funds
- has an employee or agent who withdraws unusually large amounts of cash
- has transactions to or from politically exposed persons’ personal bank accounts
- transfers funds out of Australia and into known tax haven jurisdictions
- has unreported activities, programs, or partners
- requests to transfer funds with vague justification
- structures transactions to avoid mandatory reporting requirements
- makes payments that are inconsistent with their business programs and/or activities
- is unable to account for the final use of all business resources, and/or has inconsistencies in their accounting
- operates in jurisdictions where the cultural and political values or customs view bribery and corruption as routine
- hires third parties who do not disclose their true activities or intentions to the reporting entity
- uses key personnel’s personal banking accounts instead of the NPO’s business accounts
- engages in activity inconsistent with the NPO’s activities
- has accounts that their bank is intending to close (also known as ‘de-risking’ or ‘de-banking’)
Tax and fraud
Tax evasion indicators
An NPO customer:
- has fund flows to jurisdictions know as tax havens
- and their key personnel use travel and credit cards excessively
- closes banking accounts only to set them up again in different jurisdictions with no apparent economic rationale
- has not filed their income tax return for an extended period
Fraud indicators
An NPO customer:
- has suspicious invoicing and billing provided by partners and sub-contractors
- uses multiple business structures with no apparent economic rationale
Cyber-enabled fraud indicators
An NPO customer:
- uses social media and online crowdfunding platforms to solicit donations and raise funds with no reasonable economic rationale
- purchases unusually large amounts of stored value cards
- accepts payments in digital currency, especially if the transfer is from:
- an unregistered virtual asset service provider
- peer-to-peer network
- cryptocurrency mixer/tumbler services or
- higher-risk decentralised exchanges
Terrorism financing
Terrorism financing indicators
An NPO customer:
- operates in higher-risk jurisdictions, or jurisdictions with known terrorist activity
- uses a shell organisation as a funding conduit to jurisdictions with known terrorist activity
- attempts to make a funds transfer that is stopped by their bank
- transfers funds to third parties who are noticeably different to or not associated with their declared programs or activities
- procures or attempts to procure dual-use goods. Dual-use goods are goods that have both military utility and non-military or civilian utility
- whose identification checks indicate key personnel or agents are engaged in terrorism financing, or support terrorist activity
- is headquartered in a jurisdiction where terrorist entities are known to have a substantial presence
- and their key personnel or representatives travel frequently into areas where terrorist entities are known to have a substantial presence
- transfers funds to organisations or persons known to be associated with terrorism financing, terrorist activities or terrorist entities
- is matched through screening against an Australian or international sanctions list
Open source information:
- identifies a customer has links to known terrorist organisations or terrorism activities
- indicates that a customer displays extremist ideologies (social, political, environmental etc.).
Related pages
The Financial Action Task Force has published a typologies report on the risk of terrorist abuse in non-profit organisations, which examines in detail, how and where NPOs are at risk of terrorist abuse.
The Australian Department of Foreign Affairs and Trade has a Factsheet: Arms or Related Matériel which will assist you in Identifying whether a good is arms or related materiel, and therefore whether it is a dual-used good.
The content on this website is general and is not legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.