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Illicit Financial Flows

TI Australia Position Paper

Purpose

To strengthen Australia’s anti-money-laundering (AML) regime, and prevent the flow of funds derived from corruption into and out of Australia, including by:

  • establishing a public register showing the beneficial (i.e. real) owners of companies;
  • extending, auditing and enforcing ‘customer due diligence’ or ‘know your customer’ (KYC) requirements on the part of banks, financial institutions and key professions and industries, including real estate; and
  • ensuring accessible information on ‘politically exposed persons’ (PEPs) or government officials known or suspected of having benefited from corruption, to ensure transparency in their movements and prevent international transfer of any ill-gotten gains.

The Problem

International transfer, laundering and hiding of proceeds of corruption is basic to making that corruption possible, with devastating effects on political, social and economic development in the “victim” communities – including Australia and developing countries in Africa, and in our own region, Papua New Guinea (PNG) and Pacific countries.  Illicit financial flows can also have many negative effects in recipient countries like Australia, including funding organised crime, contributing to local corruption, and distorting real estate and luxury goods markets (see Louis de Koker, The Conversation, 13 October 2015).

According to evidence from PNG (Operation Task Force Sweep), corrupt senior officials have used opportunities through regular travel to Australia, business relationships, or their relatives in Australia to invest corruptly obtained funds in Australian real estate. There are also indications of the proceeds of corruption in China, Russia, Indonesia, the Solomon Islands and Malaysia being placed into Australian real estate, bank accounts, and other liquid assets and being laundered through casinos, remittance service providers and banks.

Australia and other G20 countries are major recipients of illicit funds from developing countries.  We have an obligation to combat the misuse of their financial systems for the purpose of laundering proceeds of corruption, but Australia’s current policies, laws and institutions are failing to prevent corruption proceeds from entering the financial system…

For TI Australia’s full statement of the problem and what Australian governments, business and other stakeholders need to do about it, download our position paper.

Download Position Paper – Illicit Financial Flows

Position Paper 2 – January 2016


 

 


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