AUSTRAC IFTI reporting — international funds transfer instructions
When reporting entities must lodge an International Funds Transfer Instruction (IFTI) report with AUSTRAC, including the 10 business day deadline.
What an IFTI is
An International Funds Transfer Instruction (IFTI) is an instruction transmitted into or out of Australia, in either direction. This definition is outlined in section 46 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
There are two types of IFTI: IFTI-E, which are electronic funds transfer instructions, and IFTI-DRA, which are designated remittance arrangement instructions.
Reporting is mandatory for both the sender of an outgoing instruction and the receiver of an incoming instruction. These reports must be lodged via AUSTRAC Online.
When IFTI reports must be lodged
Section 45 of the *Anti-Money Laundering and Counter-Terrorism Financing Act* requires reporting entities to provide an IFTI report to AUSTRAC.
Reports must be lodged within 10 business days of transmission or receipt of the international funds transfer instruction. This timeframe applies regardless of the value of the instruction.
Reporting obligations apply to all international funds transfer instructions; there is no monetary threshold that triggers the requirement to lodge an IFTI report. Multiple connected instructions must be reported individually and cannot be combined to avoid reporting.
What an IFTI report must contain
An IFTI-E report must contain specific information as detailed in the Anti-Money Laundering and Counter-Terrorism Financing Rules Chapter 16. This includes the originator’s name, address, and account information, alongside the beneficiary’s name, address, and account information. Reporting entities must also include the amount and currency of the transfer, the transmission date, and identifiers of both the sending and receiving institutions.
Similarly, IFTI-DRA reports require specific content, as outlined in Chapter 17. The information required is consistent with IFTI-E reports.
Reporting entities should be aware that failing to include all required information may necessitate further investigation and potentially lead to the need for a [Suspicious matter reports — AUSTRAC].
Common compliance pitfalls
Several common errors can lead to non-compliance with IFTI reporting requirements. A frequent mistake is incorrectly classifying an instruction as domestic when it involves an overseas branch. Section 46 of the Act specifically addresses cross-border instructions, and these must be reported as IFTIs. It is also important to ensure that batched corporate payroll transfers are treated as individually reportable IFTIs, rather than aggregated. AUSTRAC threshold transaction reports (TTR) should also be considered in relation to these transfers.
Another area of concern is the timing of reporting. The obligation to submit an IFTI arises at the point the instruction is transmitted or received, not at the time of settlement. Failing to report at this transmission or receipt stage is a breach of reporting obligations.
Finally, adequate recordkeeping is essential. Institutions must maintain records relating to IFTIs for a period of seven years, as mandated by sections 107 to 116 of the Act. Failure to comply with IFTI reporting requirements can result in significant civil penalties, potentially reaching 100,000 penalty units per contravention.
Frequently asked
Do small remitters need to lodge IFTI reports?
Yes. The IFTI reporting obligation applies to all remittance providers registered with AUSTRAC, regardless of size. The 10 business day reporting deadline applies.
Is there a value threshold below which IFTI reporting is not required?
No. Unlike threshold transaction reports (TTRs) which apply to cash transactions above $10,000, IFTI reports must be lodged for all in-scope international transfer instructions regardless of value.