Last month’s raids by the Australian Federal Police (AFP) on a $10 billion money laundering syndicate involving Australian property has once again shined a bright spotlight on the holes in Australia’s anti-money laundering (AML) regime.
Chief executive of Transparency International, Clancy Moore, claims Australia’s “weak laws” have allowed criminals to “invest the proceeds of crime in our property sector”, in turn lifting property values.
“Transparency International has long called for strong reforms and, despite numerous parliamentary inquiries, Australia’s current anti-money laundering laws do not require real estate agents to carry out due diligence checks on customers or provide reports on suspicious transactions”, Moore said.
As such, “criminals see Australia as a go-to destination for washing their dirty money in our real estate sector”.
Spokesperson for Tax Justice Network Australia, Mark Zirnsak, likewise believes money laundering thrives in Australia because lawyers, accountants and real estate agents are exempt from AML laws.
“We have spoken to real estate professionals who say they are aware of large real estate companies that don’t ask too many questions about where the money is coming from. They turn up with large amounts of cash and provided they don’t say it’s the proceeds of crime, no one asks”, Zirnsak, said.
“We have seen over time companies that set up companies and lawyers and accountants facilitating deals, sometimes knowingly and sometimes recklessly, where they are not asking questions and proceeding with suspicious transactions”.
The AML circus has been running for nearly 17 years.
To cut a long story short, in 2006 Australia signed an agreement with the global Financial Action Taskforce (FATF) to introduce ‘tranche 2’ AML laws pertaining to non-financial assets (mainly property).
These laws were to apply to property gatekeepers like agents, accountants and lawyers, but have been vigorously opposed by vested interests in those same industries.
Accordingly, these global AML laws were postponed repeatedly by the Australian government following stakeholder consultations in 2008, 2010, 2012, 2014, and 2017. After each consultation, under both Labor and Liberal governments, the tranche 2 AML laws were placed into the ‘too hard’ basket.
As a result, Australia’s property market has become a global magnet for dirty money. And the above seizure from the AFP is likely just the tip of the iceberg.
NSW Greens senator David Shoebridge has called on the Albanese Government to immediately implement the tranche 2 AML laws.
“Australia is known to be an attractive destination for foreign proceeds, particularly corruption-related proceeds flowing into real estate, from the Asia-Pacific region”, Shoebridge said.
“Despite calls from Australia’s crime-fighting agencies and increasing international pressure, we still have no commitment from the federal government to implement tranche 2 anti-money-laundering laws this year”.
“Whether it’s buying a trophy home in Sydney’s north or an up-zoned apartment block in Parramatta, the lack of financial transparency required from lawyers, accountants and real estate agents is driving up prices and hiding ill-gotten gains”, he said.
So, will the Albanese Government finally implement the tranche 2 AML rules pertaining to property as promised by Australia nearly 17 years ago? Or will Labor continue to allow our property market to remain a haven for illicit foreign money?
Enough delays. Australia’s money laundering loophole must be closed once and for all.
