Significant cash transaction reports

If you are involved in a significant cash transaction of A$10,000 or more (or the foreign currency equivalent) you must submit a significant cash transaction report (SCTR). This includes receiving amounts of cash from the same customer which together amount to A$10,000 or more.

It is against the law to make a transaction in a way that enables you to avoid reporting obligations.

Reporting deadlines for a significant cash transaction report

• If the transaction involves foreign currency, you must report by the end of the day after the transaction took place.
• If the transaction was all in Australian currency, you have until 15 days after the day the transaction took place to report.

Penalties for not reporting a significant cash transaction

• If you are convicted of refusing or failing to report a significant cash transaction to AUSTRAC you can face penalties of up to two years in prison.
• If you are convicted of knowingly giving incomplete information, you can face penalties of up to five years in prison.

Example of a significant cash transaction

Alpha Cars is a motor vehicle dealer that offers its customers motor vehicle insurance policies on behalf of Delta Insurance. This means that Alpha Cars is an insurance intermediary and a cash dealer under the Financial Transactions Reports (FTR) Act.

Mr Kappa purchased a motor vehicle from Alpha Cars and paid a deposit of A$10,000 in cash on Monday and returned the following day to pay the balance of A$15,000 in cash. Alpha Cars accepted the payments.

In this example, Alpha Cars must submit two significant cash transaction reports to AUSTRAC:

• One for the cash deposit of A$10,000
• Another for the final cash payment of A$15,000.

Suspect transactions reports

You must submit a suspect transaction report (SUSTR) if you have good reasons to suspect a transaction may:

• be relevant to tax evasion or fraud
• be relevant to an investigation or the prosecution of an offence
• involve the proceeds of crime
• be part of preparations for financing a terrorism offence, or be relevant to an investigation or prosecution of a terrorism financing offence.

It is an offence to make a transaction in a way that enables you to avoid your reporting obligations.

You need to report all types of suspect transactions, whether or not physical cash is involved.

Even if a suspect transaction doesn’t go ahead, you must still report it to AUSTRAC.

Reporting deadlines

• You must submit a suspect transaction report to AUSTRAC as soon as possible after you become suspicious about a transaction.
• If your suspicions relate to terrorism financing, you should report to AUSTRAC within 24 hours. Three business days is acceptable for reporting your suspicions about other crimes.

Penalties for not reporting

• If you are convicted of refusing or failing to submit a suspect transaction report to AUSTRAC you can face penalties of up to two years in prison.
• If you are convicted of knowingly giving false or incomplete information in a report, you can face penalties of up to five years in prison.

Immunity for submitting suspect transaction reports

Any motor vehicle dealer, or someone acting on their behalf, who submits a suspect transaction report is immune from any legal action, suit or proceeding that relates to submitting that report.

Immunity does not apply if you intentionally make a false or misleading report to AUSTRAC.

Providing more information about a suspect transaction

If you are asked for more information about a suspect transaction (for example transaction records or other written records) you must provide it.

You could be asked by:

• the AUSTRAC CEO
• an officer investigating the transaction who could be
• a tax officer
• a member of the Australian Federal Police
• a Customs officer
• an employee of the Australian Commission for Law Enforcement Integrity
• an examiner or member of the staff of the Australian Crime Commission
• the Commissioner of the Australian Federal Police
• the Integrity Commissioner
• the Chief Executive Officer of the Australian Crime Commission
• the Commissioner of Taxation
• the Chief Executive Officer of Customs.

Continuing a business relationship with a customer you have suspicions about

It is up to you whether or not you choose to maintain a business relationship with the customer.

If you decide to terminate the business relationship, you must not let anyone – including the suspect – know it was because of your suspicions, or that you reported a transaction to AUSTRAC.

Record-keeping for suspect transaction reports

You must keep the following documents for seven years:

• financial transaction documents
• account and signatory information.

Exemptions from submitting suspect transaction reports

The AUSTRAC CEO can exempt a person from an obligation or obligations under the FTR Act, with or without conditions.

Find out about exemptions and how to apply for one.

Example of a suspect transaction

Motor vehicle dealer Alpha Cars offers its customers insurance policies on behalf of Delta Insurance. This means that Alpha Cars is both an insurance intermediary and a cash dealer under the FTR Act.

Mr G purchased a car from Alpha Cars and entered into a contract for an insurance policy with Delta Insurance. Mr G bought the car for A$25,000 and offered to pay in cash. Mr G also paid Alpha Cars A$7000 for a car insurance policy. The cash payments were made over several days in bundles of $5000 and $7000.

Mr G claimed the cash was the proceeds of his house sale, but the customer service representative noticed the notes were damaged and dirty. Mr G insisted on paying for the car with cash and was not going to go ahead if Alpha Cars didn’t agree. The customer service representative thought Mr G’s behaviour and the transaction were suspicious and submitted a suspect transaction report to AUSTRAC.

Several weeks later Mr G contacted Alpha Cars and asked them to cancel the insurance policy and refund the remaining insurance premium as a cheque. The customer service representative thought this request was also suspicious and submitted another suspect transaction report to AUSTRAC reporting this information.