AML/CTF “tipping off offence” effective 31 March 2025: What does this mean?

The new “tipping off” offence comes into force today (31 March 2025), under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF regime).

Existing “Reporting Entities” who are already required to comply with the AML/CTF regime will now be subject to a new criminal offence for “tipping off”, replacing the structure previously in place.

Whilst the “tipping off” offence starts to apply to existing Reporting Entities and from today, and can be prosecuted, existing Reporting Entities will have a period of one year to ensure that specific procedures are ultimately included in their AML/CTF Program and associated policies, and that staff are appropriately trained.

The new “tipping off” offence is just a part of sweeping reforms to Australia’s AML/CTF laws passed late last year, and which will fully come into effect as of March 2026.  For “Tranche 2” entities who will fall under the AML/CTF regime next year (eg. lawyers, accountants, real estate agents), the Tipping Off offence will apply right from the get-go of regulation of your particular “Designated Services”.

Why regulate AML/CTF?

Each year, billions of dirty dollars are generated from illegal activities and corrupt practices. Australia’s AML/CTF regime provides a regulatory framework for businesses offering specific types of “Designated Services” to help detect and prevent money laundering, terrorism financing, proliferation financing, and other serious financial crimes.  It also helps Australia fulfil its international obligations.

What is “tipping off”?

Reporting Entities under the AML/CTF regime are required to conduct “know your customer” checks on customers, and to report “suspicious matters” etc to the Australian Transaction Reports and Analysis Centre (AUSTRAC),  However, giving a customer a “tip off” can mean that they move their illegal activities, or change their behaviour, to try to avoid detection.  It can also prejudice the conduct of law enforcement and regulatory investigations.

Under the new criminal offence, “tipping off” occurs in the following types of instances:

• “Suspicious matter” reports (SMRs). Information that establishes that:
  • a Reporting Entity has submitted an SMR; or
  • a requirement to submit an SMR has been triggered.

• Information about notices given to Reporting Entities under sections 49 and 49B of the AML/CTF Act: Information that establishes that:
  • a Reporting Entity is required to give information or produce a document in response to a notice; or
  • a Reporting Entity has given information or produced a document.

• Information about suspect transaction reports (under the Financial Transactions Reports Act 1988):
  • information that establishes that a Reporting Entity formed a suspicion about a transaction;
  • information that establishes that a Reporting Entity provided information to AUSTRAC, and
  • any information from which someone could reasonably infer that the above was disclosed to AUSTRAC.

Tipping off is considered:

• Disclosing certain types of information to another person, where it would or could reasonably be expected to prejudice an investigation.
• Conduct or communications which leads to people changing or hiding their illegal activities.

It doesn’t matter whether a Reporting Entity only “thinks” or actually “knows” that an investigation is underway – it is enough for criminal liability to “tip off” the customer to the contemplation of it.

If you have to deal with a customer in relation to a scenario where you do not want to tip off, where possible, provide the customer with genuine reasons for engaging them. It’s imperative that you do NOT make mention of any suspicious conduct.

Penalties for tipping off

The maximum penalty for tipping off is 2 years imprisonment, or 120 penalty units (currently AUD$39,600), or both.

Who does this apply to?

• Reporting Entities under the AML/CTF regime
• An officer, employee or agent of a Reporting Entity
• A person required to give information or produce documents under a notice issued under section 49 or 49B of the AML/CTF Act
• Tranche 2 entities will need to comply from 31 March 2026 or 1 July 2026, depending on the designated services provided.

Important dates

• 31 March 2025: The new “tipping off” regime becomes an offence for existing Reporting Entities under the AML/CTF regime.
• 31 March 2026: Appropriate controls and procedures relating to tipping off must be included in a Reporting Entity’s AML/CTF Program, and implemented in practice.
• 31 March 2026 and/or 1 July 2026*: The tipping off offence will apply to the newly regulated “Tranche 2” entities, and appropriate controls and procedures must be included in their AML/CTF Program (to be developed) and implemented in practice.

*date will vary depending on the type of “Designated Services” provided by these Tranche 2 entities – majority will be 1 July 2026.

AUSTRAC recommendations

AUSTRAC’s recommendation is to start implementing policies to prevent tipping off now. This will be a legal requirement from 31 March 2026 anyway.

AUSTRAC recommends that entities apply controls such as:

• Restricting access to information to those who genuinely need to know.
• De-identifying information that is distributed more widely across your business.
• Implementing audit trails of “who” and “when” information in your business was accessed.
• Training employees about the tipping off offence.

Legal advice on tipping off and AML/CTF compliance

If you would like further clarification and training on tipping off and how to comply with AML/CTF regulations, our trade and compliance lawyers are well across the latest developments and have experience advising clients on many aspects of the AML/CTF regime.

Contact our experienced team today for more information.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.