Under Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws, one of the most important responsibilities for staff and management in registered clubs, hotels and other reporting entities is preventing “tipping off.” 

Tipping off occurs when a staff member discloses information that could alert a customer that they are being investigated, monitored, or reported to authorities for suspicious activity. 

This is a serious compliance issue and can place the organisation and individuals at risk of regulatory action. 

What Staff and Management Must Never Tell a Customer 

Staff and management must never tell a customer: 

• A Suspicious Matter Report (SMR) has been submitted
• The customer is under review
• Law enforcement may be involved
• Their transactions are being monitored because they are suspicious
• AUSTRAC has been contacted
• Their behaviour has triggered an internal investigation
• They are considered “high risk”
• Other staff have concerns about them

Even casual comments or jokes can create significant risk. 

Why Tipping Off Is Dangerous 

Tipping off can: 

• Compromise law enforcement investigations
• Allow criminals to change their behaviour
• Help individuals move or conceal funds
• Damage the organisation’s relationship with regulators
• Lead to penalties or enforcement action
• Undermine the effectiveness of the AML/CTF Program

Criminals involved in money laundering or other serious crime often test staff reactions carefully. A simple statement from an employee may unintentionally warn them that authorities are aware of their activities. 

Example of Tipping Off in a Registered Club 

A customer frequently inserts large amounts of cash into gaming machines, plays minimally, and cashes out. 

The AML/CTF Compliance Officer decides to submit an SMR to AUSTRAC. 

A staff member later says to the customer: 

“Management is looking into your transactions.”

or 

“You’ll probably be reported to AUSTRAC for that.”

This could be considered tipping off. 

Even if the staff member doesn’t intend harm, the comment could alert the customer and interfere with regulatory or law enforcement processes. 

What Staff Should Say Instead 

If a customer asks questions about identification, transaction monitoring or delays, staff should remain professional and neutral. 

Examples include: 

• “We are required to follow our compliance procedures.”
• “The venue has obligations under Australian legislation.”
• “Management will review the transaction in line with company procedures.”
• “We are required to collect this information for compliance purposes.”

Staff should avoid speculation, accusations or emotional responses. 

Internal Discussions Must Also Be Controlled 

Tipping off risks do not only occur with customers. 

Staff should only discuss suspicious matters with authorised personnel, such as: 

• AML/CTF Compliance Officers
• Senior management with a compliance role
• Approved investigators
• Law enforcement or regulators where authorised

Discussions should never occur: 

• In public areas
• Near gaming floors
• In front of other patrons
• In group chats or informal messaging
• On social media

Confidentiality is critical. 

Building a Strong Compliance Culture 

Management should ensure staff understand: 

• What tipping off means
• Why confidentiality matters
• How to respond to customer questions
• Who suspicious matters should be escalated to
• That suspicions must remain confidential

Regular AML/CTF training and practical scenario-based discussions can help staff respond confidently and professionally. 

Practical Takeaway for Clubs and Venues 

If something appears suspicious: 

• Observe
• Record
• Escalate internally
• Maintain confidentiality

Do not confront the customer. 

Do not accuse the customer. 

Do not reveal that reporting or investigations may occur. 

Protecting confidentiality helps protect the venue, staff, regulators and the broader community from financial crime. 

#CHDPartners #CIRT #RTO #WHS #WorkHealthAndSafety #Training #RiskManagement #SecurityAndSafetyCompliance #SME #SmallBusiness #MichaelHuggett #AUSTRAC #AMLCTFAnnualComplianceReports #AMLCTFCompliance #AMLCTF #AntiMoneyLaundering