25 October 2018
Recent reports indicate the Australian Government will not introduce much-awaited laws to tackle money-laundering, but instead introduce technical tweaks to current legislation. As the Government reviews the Anti-Money Laundering and Counter-Terrorism Financing Act, Transparency International Australia urges Parliamentarians to take a strong stance against laundered money and illicit flows.
Serena Lillywhite, CEO of Transparency International Australia said, ‘Transparency International’s global research, Doors Wide Open, found Australia to be one of the most attractive destination for dirty money, especially through the property market.
‘While Australia regulates its major money-laundering and terrorism financing channels, such as banking, remittance and gaming; non-financial businesses and professions, such as real estate agents, lawyers and accountants, are still not subject to anti-money laundering/counter-terrorist financing requirements.
‘Investment in Australian property is an easy and convenient way to hide hundreds of millions of dollars from criminal investigators, tax authorities or others tracking criminal behaviour and the proceeds of crime.’
To turn off the tap on these illicit flows, the Government needs to
- Include non-financial businesses – such as real-estate agents, lawyers and accountants, to comply with the Anti-Money Laundering and Counter-Terrorism Financing Act.
- Establish a public register of Beneficial Ownership, including trusts, to ensure real estate agents, lawyers and conveyancers, as well as accountants undertake Customer Due Diligence to discover the ultimate beneficiaries, and submit Suspicious Transactions Reports to AUSTRAC.
- Improve the working relationships between different actors involved in anti-money laundering to better share important information as money flows between countries of origin, transit countries, and destination countries.
- Banks and other financial institutions must treat Politically Exposed Persons (individuals who hold a prominent public function) as high-risk and apply enhanced due diligence.
- When facilitators fail to meet their obligations, authorities should impose appropriate sanctions, from fines and de-licensing of companies to prosecution of individuals.
Serena Lillywhite said, ‘money-laundering is a global problem. Every nation needs to play its part in closing the loopholes that allow criminals to enrich themselves at the expense of the community.’
The ease with which dirty money is laundered in the Australian property market was recently highlighted at the world’s leading anti-corruption conference, the International Anti-Corruption Conference in Copenhagen (October 22-24).
‘As a go-to destination for dirty money, Australia must play its role in turning off the tap of illicit flows, often the proceeds of crime and corruption.
‘Money-laundering has a direct impact on people in both poor and wealthy countries. These illicit funds hinder economic growth and help perpetuate conflict around the world. They often end up invested in Western property markets and luxury goods.’
TIA’s national conference in April 2019 will put this issue once again on the agenda. A key conference theme will explore money laundering through the Australian property market.