Both Commonwealth and some State legislation requires the reporting of specified financial transactions. The legislation aims to restrict tax avoidance and to assist in the detection of crime and by preventing the laundering of money.

The Financial Transactions Reports Act 1988 (Cth) (the ACT) requires suspect transactions to be reported to the Australian Transaction Reports and Analysis Centre (AUSTRAC). AUSTRAC passes on these reports to taxation and law enforcement authorities and also analyses the data. The Australian Taxation Office Australian, Customs Service, Federal Police and the Australian Securities Commission have access to all the information held by AUSTRAC.

The Act defines the types of transactions that are to be reported, the people who are to report them and the details of the transaction to be reported.
A cash dealer is required to report certain transactions. The Act defines a cash dealer to include:

  1. Financial institutions
  1. A body corporate that is, or would be if incorporated in Australia, a financial corporation.
  1. Insurers or their intermediaries
  1. Dealers in securities
  1. Futures brokers
  1. Share registrars
  1. Trustees or managers of a unit trust
  1. Persons carrying on the business of selling travelers' cheques
  1. Bullion dealers
  1. Persons carrying on any business that includes collecting currency, preparing payrolls, delivering money.
  1. Operators of gambling houses, bookmakers and operators of totalisator betting services.


A cash transaction is a transaction involving the physical transfer of currency from one person to another. Currency is the coin or paper money of Australia or another country. A significant cash transaction is a cash transaction involving the transfer of currency of the value of $10,000 or more.

A cash dealer must report to AUSTRAC any significant cash transactions with its Australian customers. A cash dealer must also report any suspect transactions whether in cash or otherwise where there are reasonable grounds to suspect that there is tax evasion or criminal activity involved or that the transaction may be the proceeds of crime. The details of international telegraphic transfers of significant cash transactions to and from Australia must also be provided. In addition, cash dealers are required to verify the identify of signatories to accounts in accordance with the Act and regulations.


The Act excludes the reporting by some financial institutions, such as banks, of routine cash transactions and these include payroll transfers, routine transactions with established retail customers and public authorities and transactions between financial institutions. The institution must however keep a register of these exempt transactions.

The Act also imposes reporting obligations on members of the public. Proper identification must be provided when opening an account with a cash dealer. In addition the public is required to report the taking or sending of $5,000 (in Australian currency or equivalent) into or out of Australia. The report can be made directly to AUSTRAC or to the Australian Customs Service who will forward it to AUSTRAC.

There is state/territory legislation that mirrors or is similar to the Commonwealth legislation. For example, in New South Wales, the Financial Transaction Reports Act 1992 (NSW) provides for the giving of further information in relation to suspect transactions reported under the Commonwealth Act. The Act also covers reports on suspect transactions which may not be reported under the Commonwealth Act but which may be relevant to the administration of the Independent Commission Against Corruption Act 1988 (NSW) or enforcement of other Acts such as the Confiscation of Proceeds of Crime Act 1989 (NSW).


Length: 500 words

Following on from your previous “work to be submitted” scenarios, your proposed real estate agency is involved in a number of transactions where the amount is payable by cheque or cash. For example, deposit paid on the purchase of a house and/or rent money paid by tenants. How are these transactions affected by the law applicable to negotiable instruments covered in Learning Outcome 4?

Describe how your agency would be affected by the Financial Transactions Reports Act 1988 (Cth).


Baker, CD. (1985) Introduction to Torts, Law Book Co., Sydney.
(Coe v Commonwealth (1979) 24 ALR 118 at 138

Fleming, JG. (1987) The Law of Torts (7th Ed) Law Book Co., Sydney

Hedley Byrne v Heller [1963] All ER 575

Milirrpum v Nabalco (1971) 17 FLR 141 at 201