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Risk ratings explained

What risk ratings are for

Every client in AML Simple is assigned a risk rating: Low, Standard, or High. The rating reflects the level of money laundering or terrorism financing risk associated with that client and transaction.

Higher risk ratings require closer attention and additional due diligence steps.

What drives the rating

AML Simple calculates an initial risk rating based on the information you enter. Factors that push a rating up include:

  • Transaction value — higher-value property transactions carry more risk
  • PEP status — Politically Exposed Persons are subject to enhanced scrutiny
  • Country risk — clients or funds from FATF grey or black-listed jurisdictions
  • Client type — complex company structures, trusts, or clients acting on behalf of another party
  • Transaction type — unfinanced cash purchases or rapid sequential purchases

What each rating means

Low risk — standard CDD applies. Verify identity, record the transaction, and screen against the DFAT sanctions list.

Standard risk — standard CDD applies. This is the default for most residential buyer and seller clients.

High risk — Enhanced CDD is required. You must get senior management approval to proceed with the relationship, verify the source of funds, and apply closer ongoing monitoring. See Verifying client identity for what Enhanced CDD involves.

Overriding a rating

You can override the system-generated rating from the client record if you have a specific reason. Select Edit risk rating, choose the new rating, and enter a reason in the notes field.

Always document your reason when you override. If AUSTRAC ever reviews your records, the reasoning behind your risk decisions should be clear.

Common reasons to override upward: information emerged during the relationship that wasn’t captured at onboarding (e.g. you learned the client is acting for an undisclosed third party). Common reasons to override downward: the transaction has a clear, low-risk profile that the system did not fully account for.

The rating can be updated at any time during the relationship. Re-assess when the client’s circumstances change or when a new transaction begins.