Property continues to be the AML weak link in Australia

Australia is still lagging behind global standards in the developed world when it comes to combating the flow of illicit money entering the property market. AUSTRAC has estimated that there were AUD$1billion worth of suspicious transactions in the Australian property market from China in the 2016 fiscal year.  

The Financial Action Task Force (FATF) has for years criticised Australia’s anti-money laundering laws for not applying to real estate agents, accountants, lawyers or high-value dealers to implement AML Programs and to report suspicious transactions to AUSTRAC.

Anthony Quinn, CEO of Arctic Intelligence said “when the FATF return later this month and get a better understanding on the complete lack of progress that has been made since their last visit in 2015, Australia can expect to rightfully be raked over the coals.  Of the 84 recommendations committed to less than 10% have been actioned and none of the substantial reforms like Tranche 2 or mandating independent audits every two-years have been implemented – this makes Australia look completely incompetent on the international stage after successive governments have lacked any political will to make the necessary changes to bring Australia in line with the rest of the world”.

In 2006, the Australian Government agreed to expand anti-money laundering (AML) rules for real estate gatekeepers, including real estate agents, accountants and lawyers (Tranche 2) to prevent illegal funds from flowing into property. 

However, the reform has been continuously postponed as because of strong politically lobbying by powerful industries impacted by these laws. This situation has led to Australia having some of the weakest AML rules in the world when it comes to property and is a haven for the parking of illegal funds due to the lack of regulation to prevent this.

The Australian Banking Association and the Greens are now calling on the federal government to tighten anti-money laundering laws.

“The exemption for lawyers, accountants and real estate agents is a gaping hole in Australia’s anti-money laundering laws,” said Greens Senator Peter Whish-Wilson, “We’ve had 13 years of inaction, from both Liberal and Labor governments, on the fabled Tranche 2.”

In the Australian Banking Associations’ submission last year, it said, “The ABA recommends progressing the Tranche 2 reforms as a priority. It is vital that Australia closes the current gaps in the Australian money laundering/terrorism financing regime.”

Posted in ,