Is tipping off a criminal offence?

Yes, in each of the three markets, though the wording differs. In the UK the regulated-sector offence carries a maximum of two years' imprisonment on indictment. In Australia the penalty is up to two years, 120 penalty units, or both. New Zealand's Anti-Money Laundering and Countering Financing of Terrorism Act also makes unlawful disclosure of a suspicious activity report an offence. In the UK and Australia it can attach to individual staff as well as the institution, and it is separate from any laundering offence.

Can a bank tell a customer their account is under review?

It can say something accurate without saying why. A statement that an account or payment is being reviewed, with no mention of a report, is usually defensible; a statement that a report has been filed or that compliance suspects something is not. What is safe in a given case depends on the local law and the bank's procedure. The relationship manager's job is to stay within the bank's approved wording and to pass the question to the team handling the matter.

Can a bank close an account without giving a reason?

Often, subject to the contract, the relevant banking code and the rules on notice, but the safer course is a true reason that does not touch the report. AUSTRAC's guidance gives examples such as activities falling outside the bank's risk appetite or a customer failing to supply requested details, and warns that a vague reference to compliance obligations can increase the risk. In the UK and New Zealand the same care applies: an exit timed around a report can itself alert the customer.

What is the difference between tipping off and prejudicing an investigation?

They are two offences in the UK's Proceeds of Crime Act. Tipping off, under section 333A, applies to information obtained in regulated-sector business and to disclosure that a report has been made or an investigation is contemplated or under way. Prejudicing an investigation, under section 342, covers disclosures likely to prejudice a range of investigations, and falsifying or destroying relevant documents, and carries up to five years. Other markets divide the conduct differently.

// WORKED EXAMPLEWHERE THE RISK SITS

Tipping Off: What a Banker Can Say to a Client

The client asks why. The report stays out of the answer.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-09 · 6 MIN READ

// THE SHORT ANSWER

A client rings to ask why a payment has not gone, and the banker knows a suspicious report has been filed. What can be said? Very little, and nothing about the report. Each of the three markets makes it an offence to disclose a filing in certain circumstances: the UK and Australia add a test of prejudice to an investigation, while New Zealand bars disclosure outside named recipients. The banker's task is to give an accurate answer that does not reveal the report, and to hand the question to the team handling the matter.

BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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PART OF How Banks Work

// 01 — WHY A BANKER CANNOT EXPLAIN A DELAY

A suspicious report only works if the subject does not know about it. Money can be moved, records destroyed and accounts emptied in the time it takes to make one phone call. So the laws that require the bank to report also restrict what the bank's people may say afterwards, and those people include the relationship manager, who is the person most likely to be asked.

That is why the offence bites hardest at the front of the bank. The banker usually has a long relationship with the customer, a natural wish to explain, and a credit file that still needs attention. The offence is separate from any laundering. A banker who knows nothing of the origin of the funds can commit it simply by being helpful.

// 02 — HOW THE OFFENCE IS WRITTEN

UK Proceeds of Crime Act 2002 s 333A

report made, or investigation contemplated or under way

+ disclosure likely to prejudice an investigation

Australia AML/CTF Act 2006 s 123 (rewritten by the 2024 reforms)

suspicious matter report, its contents, or an AUSTRAC notice

+ would or could reasonably be expected to prejudice

NZ AML/CFT Act 2009 ss 46 and 94

information relating to a suspicious activity report

disclosed outside the named recipients

The differences matter. The UK offence covers information obtained in the course of regulated-sector business, and a person who neither knew nor suspected the likely effect does not commit it. Australia's test looks to whether the disclosure would or could reasonably be expected to prejudice an investigation, even one that has not begun. Both carry a maximum of two years' imprisonment. New Zealand's Act prohibits disclosure of information related to a report except to named people, and section 94 makes the unlawful disclosure an offence.

The exceptions are narrow, and a banker rarely fits them. The UK's allowance for telling a client in order to dissuade them from an offence is written for lawyers and relevant professional advisers. Australia's is for legal practitioners, accountants and others named in the rules. Sharing with another institution is allowed only on defined conditions.

// 03 — THE EXAMPLE

An importer of used construction machinery in England, constructed for this page like every figure in it, has a US$2m overdraft. A US$640,000 credit arrives from a company with no trading link to the importer. Two days later, a director asks to send US$600,000 to a personal account abroad. The relationship manager reports internally on a Monday. The bank's nominated officer files with the National Crime Agency, asks for a defence against money laundering, and holds the payment. UK law then sets the clock:

Notice period 7 working days, from the first working day after filing

If refused 31-day moratorium from the day the refusal arrives

Filed Monday (no public holidays): notice period ends Wednesday of the following week

Refused that day: moratorium runs about 30 more days

Longest ordinary wait, before any court extension: about 40 calendar days

On Wednesday the director rings. Three answers are available. 'Compliance has flagged it and we are waiting on the agency' discloses the report. 'It is just routine' sounds kind, but it is untrue, and it will read badly if the matter ever comes to light. 'The payment is being reviewed and I cannot give you a date; the team dealing with it will be in touch' tells the truth and gives nothing away. The banker then routes the call to the nominated officer's team, as the bank's procedure requires.

Consent arrives on the sixth working day, and the payment goes. The overdraft review falls due in the same fortnight, and the credit paper records what the file can support: an unexplained receipt and an unusual payment request. It does not say a report exists.

DEFINED IN ONE PARAGRAPH → · FINANCIAL CRIME, THE DESK → · A ONE-MINUTE FILE ON IT →

// 04 — HOW IT DIFFERS FROM ASKING A QUESTION

Tipping off is about what the banker reveals, not what the banker asks. A bank is expected to know its customer, and asking for an invoice, a shipping document or the source of a payment is part of ordinary due diligence. AUSTRAC's guidance says that asking for more information is not, of itself, tipping off. The risk comes from how the question is framed: a banker who tells a customer the story sounds dishonest has told them something.

It also differs from confidentiality. A customer can waive the bank's duty of confidence about the customer's own affairs. A customer cannot waive tipping off, because the rule protects an investigation and not the customer. And in the UK it sits beside a separate offence of prejudicing an investigation under section 342, which applies to disclosures more generally and carries a heavier maximum, while a regulated-sector disclosure of the kind section 333A covers is dealt with under that section instead.

// 05 — WHERE IT DECIDES A FILE

It decides who can see what. Reports and their working papers are usually held away from the credit file, with the relationship manager told only what is needed. It shapes the credit paper, which rests on the underlying facts and leaves out the existence of a report. And it complicates syndicated or club lending: if a co-lender asks why a bank has gone quiet, that is a question for the bank's nominated officer, not an occasion for a hint.

The most delicate point is ending the relationship. AUSTRAC's guidance is that a bank can tell a customer about a risk-based decision to exit, provided the conversation does not imply a report, and it warns against vague references to AML obligations as a reason. New Zealand's Law Society makes the same point to lawyers considering ending a retainer: the act of leaving can itself tip the client off. So the timing and wording of an exit are settled with the financial crime team, and the reason given is a true one that does not point to the report.

THE AML PRACTICE TEST → · BENEFICIAL OWNERSHIP →

// SOURCES

The documents the statements on this page rest on. Each was opened and checked when cited.

Proceeds of Crime Act 2002 (UK), sections 333A, 333D, 335 and 342 — Sets out the regulated-sector tipping-off offence and penalty; sections 333D and 335 give the exceptions and the notice and moratorium periods — sections 02 and 03.
Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Australia), Schedule 5, item 2 — replacing section 123 — The rewritten offence, the 'would or could reasonably be expected to prejudice' test, the penalty and the exceptions — section 02.
Department of Internal Affairs (New Zealand), AML/CFT Regulatory Findings Report 2019–2020 — Describes disclosing a suspicious activity report, or its existence, to its subject as tipping-off and a serious offence under the Act — section 02.

// QUESTIONS PEOPLE ASK

Is tipping off a criminal offence?: Yes, in each of the three markets, though the wording differs. In the UK the regulated-sector offence carries a maximum of two years' imprisonment on indictment. In Australia the penalty is up to two years, 120 penalty units, or both. New Zealand's Anti-Money Laundering and Countering Financing of Terrorism Act also makes unlawful disclosure of a suspicious activity report an offence. In the UK and Australia it can attach to individual staff as well as the institution, and it is separate from any laundering offence.
Can a bank tell a customer their account is under review?: It can say something accurate without saying why. A statement that an account or payment is being reviewed, with no mention of a report, is usually defensible; a statement that a report has been filed or that compliance suspects something is not. What is safe in a given case depends on the local law and the bank's procedure. The relationship manager's job is to stay within the bank's approved wording and to pass the question to the team handling the matter.
Can a bank close an account without giving a reason?: Often, subject to the contract, the relevant banking code and the rules on notice, but the safer course is a true reason that does not touch the report. AUSTRAC's guidance gives examples such as activities falling outside the bank's risk appetite or a customer failing to supply requested details, and warns that a vague reference to compliance obligations can increase the risk. In the UK and New Zealand the same care applies: an exit timed around a report can itself alert the customer.
What is the difference between tipping off and prejudicing an investigation?: They are two offences in the UK's Proceeds of Crime Act. Tipping off, under section 333A, applies to information obtained in regulated-sector business and to disclosure that a report has been made or an investigation is contemplated or under way. Prejudicing an investigation, under section 342, covers disclosures likely to prejudice a range of investigations, and falsifying or destroying relevant documents, and carries up to five years. Other markets divide the conduct differently.

// NEXT TO IT

// ON WHOSE DESK

The seats that read this term in an ordinary week. Each page says what the seat is for, who arrives in it, and the shape of the round it runs.

Compliance officerTranslates the rules the bank operates under into things the business can actually do, and checks that it does them.
Internal auditorThe third line: checks independently that the first two did what they said they did, and reports to the board when they did not.
Financial crime analystDetects and investigates money laundering, sanctions breaches and fraud moving through the bank.

THE IN-TRAY · ONE MINUTE

Make the call on one file.

A short file on the ground this page covers. Every option opens with how far it sits from a senior banker’s read.

SIGNAL OR NOISE · THE CONDUCT · FINANCIAL CRIME

An importer you have banked for years starts paying a new overseas supplier far above market prices for ordinary goods. The goods are shipped and invoiced normally.

Signal or noise?

3 MORE ON THE CONDUCT · FINANCIAL CRIME →WHERE DO YOU READ FROM? THE PLACEMENT →

THE READING ROOMIN ONE PARAGRAPHTipping off What is tipping off, and why can a banker not warn a client?