What is a tipping off offence?
The Australian Transaction Reports and Analysis Centre (AUSTRAC) defines tipping off as the act of disclosing certain types of information to a person or persons where it could potentially prejudice an investigation.
What has changed?
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (Amended Act) – which received royal ascent in December 2024 and amended the Anti-Money Laundering and Counter-Terrorism Act 2006 (Cth), sought to reform the 2006 act and Australia’s AML/CTF regime with three particular goals in mind:
1. Broaden the scope of AML/CTF obligations for tranche 2 entities – “high-risk services” such as:
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- real estate professionals
- lawyers
- conveyancers
- dealers of metals and precious stone
- trust and company service providers
- accountants
2. Shift from a “compliance-based approach to a risk-based outcomes-oriented approach” that allows businesses and reporting entities to structure their AML/CTF programs in the manner that best suits their needs.
3. Reform the Australian AML/CTF regime to better respond to the changing world of criminal activities.
In tandem with this act’s ascent was the repeal of the Financial Transaction Reports Act 1988. AUSTRAC notes that despite the act being repealed, some reporting entities (primarily cash dealers) that were affected by provisions of the now-repealed act will still be expected to maintain certain confidentiality and record-keeping obligations.
Tipping off changes
As of 31 March 2025, disclosing certain types of information to another person(s) will be treated as a criminal offence regardless of intent or awareness of the existence of an investigation. The maximum penalty for tipping off will officially be two years imprisonment, 120 penalty units, or both.
Reporting entity obligations
As explained by AUSTRAC, reporting entities (businesses involved in activities that include gambling, bullion, or financial services that have geographic ties to Australia) must not disclose suspicious matter reports (SMRs)–related information that is “protected by the tipping off offence” to anyone that might prejudice an investigation – with the exception of an “AUSTRAC entrusted person”.
Information protected by the tipping off offence
Section 123(2) of the Amended Act refers to information and defines what kind of information is or is not covered by the act. This includes the following:
- Suspicious Matter Reports: A reporting entity is required to give or has given a document or copy of it that contains an SMR or information about such a report
- AUSTRAC Notices: A person is required by notice to give or has given information or produced a document to give to AUSTRAC
- Suspect Transaction Reports: Information about suspect transactions reports as were in force in the Financial Transaction Reports Act 1988 prior to its repeal
Prejudicing an investigation
To assist individuals and reporting entities in determining whether or not potential actions could harm an investigation, AUSTRAC published several example scenarios of tipping off risks that could occur when dealing with customers, which are meant to help reporting entities consider how they could best structure their AML/CTF controls and policies to reduce tipping off risks.
Does it apply to me?
A tipping off offence applies to anyone who is or previously was a reporting entity or an officer, employee, or agent of a reporting agency and anyone required to provide information under sections 49 and 49B of the 2006 AML/CTF Act.
Key factors
Alongside this, AUSTRAC encourages organisations to consider key factors that determine whether or not information would prejudice an investigation:
- When the disclosure is made
- How the disclosure is made
- What information is disclosed
- To whom the disclosure is made
Third parties
Information can be shared with third parties provided it does not prejudice an investigation. To reduce the chances of a tipping off offense, AUSTRAC encourages having proper controls and policies in place, including:
- Identifying what information a business holds
- In what situations tipping off could occur
- What steps could be taken to prevent such outcomes
Further, AUSTRAC recommends that individuals and reporting entities ensure that third parties and external providers have appropriate controls in place to prevent any chance of tipping off from occurring.
Key Takeaways
The changes made to tipping off offenses provide benefits for both the government and reporting entities alike. For the former, it modernises the AML/CTF regime, thus allowing it to better respond to changes in the criminal world.
For the latter, it will make it easier to understand AML/CTF and SMR reporting obligations and adjust internal controls and policies to reduce the risk of tipping off, as well as ensuring best practices when sharing information with third parties and external vendors.
