Policy · AML/CTF — the practice as a reporting entity
Suspicious matter escalation, reporting and legal professional privilege procedure
Procedure from internal escalation to lodgement of a suspicious matter report: when the obligation arises, the 24-hour, 3 and 5 business day deadlines, privilege review and LPP forms, what AI may and may not do, client communications and tipping off.
- Kind
- Policy. A policy or procedure for a firm or client.
- Where it applies
- Australia
- AI use
- Red Keep AI out of the decisive steps. A lawyer does the work.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked against the cited sources on 17 October 2026.
- Version
- 1
- Source
- Written for this library
When to use it
Adopt as part of the AML/CTF program of any practice providing designated services. Use whenever a staff member notices unusual activity, CDD cannot be completed, or a client's instructions raise a concern. It is lawyer-led throughout.
How AI may be used
Lawyer-led. AI may index the file into a dated chronology and compare the practitioner's completed text against the file for dates, amounts and names, inside a controlled environment, but it writes no part of the report or of anything said to the client.
AI may
- Index the file into a dated chronology of instructions, transactions, communications and documents for the practitioner to read.
- List the report fields for which the file holds no source.
- Compare the practitioner's completed text against the file for dates, amounts, names and account details.
AI must not
- Must not write any part of the SMR, the grounds of suspicion, an LPP form or any client communication.
- Must not decide whether a suspicion is held on reasonable grounds, whether information is privileged, or what the client is told.
- Must not operate outside the practice-controlled environment approved by the compliance officer.
The lawyer checks
- The time the suspicion was formed is recorded and the correct deadline applied.
- Privilege has been assessed item by item, with the basis recorded and independent advice sought where in doubt.
- No disclosure has been made that could tip off, and everyone who knows of the escalation is listed.
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Official form
Open the official form. Always use the current version from the issuer.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in AML/CTF — the practice as a reporting entity
- AML/CTF program for small legal practices: AUSTRAC legal profession starter kit adoption guide
- Designated services capture map and enrolment decision record (AML/CTF Act s 6(5B), table 6)
- Initial customer due diligence checklist for law practice designated services
- AI and automated tools in the AML/CTF program: control standard
- Client letter: why we need to verify your identity (AML/CTF obligations)
All precedents for AML/CTF — the practice as a reporting entity · Tasks and AI use in this area