Australia a ‘place of choice’ for money laundering due to lack of regulation

ANZ Bank says a lack of political will has seen successive Australian governments fail to extend money laundering laws to cover lawyers, real estate agents and accountants.

Australia’s hot property market is an attractive haven for criminals, with estimates that billions of dollars of dirty money is being laundered through residential property.

Australia’s anti-money laundering law does not cover real estate agents, lawyers and accountants, despite promises when the law was enacted in 2006 that the legislation would be widened.

ANZ’s head of financial crime, Guy Boyd, is scathing of the failure of subsequent governments to extend the legislation.

Money laundering occurs when criminals channel money from illegal assets or activities into legal assets such as a trust fund or by buying property in an attempt to “clean” the money.

Federal Justice Minister Michael Keenan defended Australia’s anti-money laundering regime.

“We do have very robust arrangements in Australia, including for property, but we are looking at how we can improve those arrangements,” Mr Keenan said at a press conference in Sydney on Wednesday.

Australia’s anti-money laundering (AML) legislation covers organisations including banks and money changers.

Mr Keenan said industry consultation on extending the laws was continuing.

International bodies like the Financial Action Task Force and Transparency International have slammed Australia’s lack of action on forcing lawyers, real estate agents and accountants to report suspicious transactions.

Mr Boyd said the lack of regulation makes Australia an attractive target for money launderers.

“I think Australian real estate is obviously an attractive destination for capital, both legitimate and illegitimate,” he said.

AUSTRAC, Australia’s financial crimes regulator, said in a report two years ago that the laundering of illicit funds through real estate was “an established money laundering method in Australia”.

It said around $1 billion in suspicious transactions came from Chinese investors into Australian property in 2015-16.

Australia’s housing market has been targeted by money launderers from countries including Papua New Guinea, Malaysia and China.

Dudley House, student accommodation in inner city Melbourne, was bought at a significantly inflated value by Malaysian officials.

Thomson Reuters financial crimes analyst Nathan Lynch said the lack of regulation covering gatekeepers like lawyers makes Australian property a weak link for criminals.

“The money flows to the path of least resistance and in reality that is the property sector,” Mr Lynch said.

http://www.abc.net.au/news/2017-07-13/should-australias-anti-money-laundering-laws-be-extended/8703354

Photo: ABC News Peter Drought