The Tipping Off Offence (Section 123): A Plain English Guide for Property Professionals

What is tipping off?

AUSTRAC's tipping off guidance defines tipping off as:

"disclosing certain types of information to another person, where it would or could reasonably be expected to prejudice an investigation"

This is known as the tipping off offence and it is set out in section 123 of the AML/CTF Act.

The reason tipping off matters: if a customer or their associate learns that they've been reported to AUSTRAC, they can change or hide their activity, move money, or disappear — any of which could prejudice the investigation.

What's the maximum penalty for tipping off?

The dollar value of a penalty unit is set under the Crimes Act and changes periodically — so we don't publish a specific dollar figure here. For the current penalty unit value, refer to the AUSTRAC consequences page or the Attorney-General's Department.

Who the tipping off offence applies to

Per AUSTRAC's guidance, the tipping off offence applies to persons who are (or were previously) reporting entities under the AML/CTF Act. It also applies whether you create, share or receive the protected information.

Practical implications for property professionals:

• Real estate agents, conveyancers, property developers, buyers agents, jewellers and bullion dealers (once they become reporting entities from 1 July 2026) are all subject to section 123.
• Staff members and contractors who handle protected information are captured.
• Former reporting entities remain subject to the offence in relation to protected information they obtained while regulated.

What information is protected by the tipping off offence

Per AUSTRAC, the tipping off offence captures information about:

• Suspicious matter reports (SMRs) — the fact that one has been submitted, or that a requirement to submit one has been triggered
• Reports and documents prepared for the purpose of meeting SMR obligations (including copies)
• Any document purporting to set out information contained in an SMR
• Information from which a reasonable person could infer any of the above was provided to AUSTRAC

AUSTRAC also notes that under the repealed Financial Transaction Reports Act 1988, some legacy information remains protected if you were a cash dealer prior to 7 January 2025.

What is NOT tipping off

AUSTRAC's guidance is explicit about what isn't tipping off. The following will generally not breach section 123:

• Conducting reasonable enquiries about unusual customer activity
• Conducting Enhanced CDD, provided your SMR obligation hasn't been triggered and you're just asking a customer reasonable questions
• Disclosures to Australian law enforcement, intelligence or regulatory agencies
• Disclosures to third parties where the disclosure would not or could not reasonably be expected to prejudice an investigation (for example, engaging a compliance consultant under controls)
• Telling a customer you need to collect further information to comply with your general AML/CTF obligations (as long as you don't reference SMRs, suspicions or an investigation)

There's also an exception under section 123(5) for specific disclosures between reporting entities for permitted purposes.

Controls AUSTRAC expects in your AML/CTF policies

AUSTRAC's guidance states:

"You must adopt and maintain AML/CTF policies in your AML/CTF program to prevent tipping off."

Your policies should:

• Identify the situations where disclosing information would or could reasonably be expected to prejudice an investigation
• Determine the measures you will apply to prevent tipping off when disclosing or dealing with information
• Require training for staff with access to protected information (regular training for all exposed staff; specific training for customer-facing roles)
• Require that you verify third parties have appropriate tipping off controls before sharing protected information

AUSTRAC's own examples of tipping off

AUSTRAC's tipping off guidance provides specific examples. A condensed version:

• Example — bank during Enhanced CDD. A bank suspects drug-trafficking indicators. Bank submits SMR and continues to conduct ECDD. Bank frames further questions as general AML/CTF compliance — not as concern about money laundering. Not tipping off.
• Example — remittance provider during ECDD. Provider submits SMR within 3 business days. Follow-up questions to customer are presented as general requirement under AML/CTF policies — no reference to SMRs or suspicion. Not tipping off.
• Example — careless pub disclosure. Staff discuss unusual cash behaviour with an untrained colleague who has a friendly relationship with the customer. Colleague later tells the customer. Customer changes behaviour. This IS tipping off. AUSTRAC notes it could have been avoided with proper controls on who can discuss suspicions.

What to do if a customer asks "why are you asking me this?"

This is the situation most property professionals worry about. AUSTRAC's guidance is pragmatic:

• You can acknowledge you need to collect information to comply with AML/CTF obligations. That's a genuine reason that doesn't disclose a suspicion.
• Do NOT reference SMRs, suspicion, concerning activity, or AUSTRAC notices.
• Where you need to end a business relationship, provide a genuine reason that doesn't indicate you're suspicious of them.
• If the customer presses, document the interaction and route any sensitive discussion through your compliance officer.

AMLTranche's SMR workflow includes tipping-off controls by design — role-split so only authorised personnel see SMR details, and customer-facing staff see only the operational requirements (e.g., "please provide additional ID documents").

Frequently asked questions

What is the maximum penalty for tipping off in Australia?

AUSTRAC states the maximum penalty for tipping off under section 123 of the AML/CTF Act is imprisonment for 2 years or 120 penalty units, or both.

Does tipping off apply to staff as well as the business?

Yes. The offence applies to persons who are (or were previously) reporting entities, and captures creation, sharing and receipt of protected information. Staff members handling protected information are captured.

Is it tipping off to ask a customer extra questions?

Not by itself. AUSTRAC states that conducting reasonable enquiries and Enhanced CDD is not tipping off, provided you don't disclose that an SMR has been or may be lodged. Frame requests as general AML/CTF requirements.

Can I tell a customer I need to end their engagement?

Yes, but provide a genuine reason that doesn't indicate you suspect them of anything. Do not disclose the existence of an SMR or a suspicion.

What if a colleague accidentally tips off a customer?

AUSTRAC's examples show that careless disclosures by untrained staff can constitute tipping off. This is why AUSTRAC expects you to restrict access to protected information and train all staff with potential exposure.

Disclaimer: This article provides general information sourced from AUSTRAC's published guidance and the AML/CTF Act 2006. It does not constitute legal advice. Confirm your specific obligations with AUSTRAC or a qualified legal adviser.