Australia must act on money laundering

By Leith van Onselen

Earlier this year, the Paris-based Financial Action Task Force (FATF) on money laundering warned that Australian residential property is a haven for international money laundering, particularly from China. The Australian Transaction Reports and Analysis Centre (AUSTRAC) also warned that “laundering of illicit funds through real estate is an established money laundering method in Australia”.

With these facts in mind, it is interesting to read this morning that the UK Conservative Government is taken action to stop foreigners from buying homes with “plundered or laundered cash” as part a global effort to defeat corruption. From Euro News:

Britain on Tuesday said it would clamp down on the use of “dirty money” to buy up expensive properties, promising to expose the owners of anonymous foreign shell companies hiding cash in London’s buoyant housing market.

Prime Minister David Cameron, speaking in Singapore on a regional trade visit, said the promise was part of anti-corruption efforts to ensure that Britain did not become a “safe haven for corrupt money from around the world”.

“We know that some high-value properties – particularly in London – are being bought by people overseas through anonymous shell companies, some of them with plundered or laundered cash,” Cameron said. “There is no place for dirty money in Britain”…

Around 122 billion pounds of property in England and Wales is owned via offshore companies, Cameron said, announcing that a central registry of land and properties owned by foreign firms would be set up in the coming months, giving details of who owns around 100,000 property titles.

“We need to stop corrupt officials or organised criminals using anonymous shell companies to invest their ill-gotten gains in London property, without being tracked down,” he said.

One wonders how long the Australian Government can continue to ignore this issue.

Australia’s draft rules on anti-money laundering (AML) affecting real estate were released in 2007, but have been all but ignored by the federal government ever since. In the meantime, dodgy foreign money – mostly from China – has been allowed to price young Australians out of home ownership, assisted of course by egregious tax policies, the immigration ponzi, and planning bottlenecks.

Tightening Australia’s anti-money laundering rules also makes perfect macro-economic sense, since it would take the heat out of housing, lower financial stability risks, and allow the RBA to lower interest rates further than would otherwise be possible, putting downward pressure on the dollar. As noted by Michael West last month:

…record low rates, record high property prices, record household debt to income levels (150 per cent plus) and banks lending at 95 per cent loan-to-valuation ratios is potentially catastrophic – especially in the event that unemployment rises. So why is the government dithering on AML?

It’s time for the Government to stop its willful neglect and put the clamp on corrupt money gushing into Australia’s homes.

[email protected]


    • Abbott sends your sons and daughters into war but in directly funds organisations like isis through property, but shit happens right Abbott

    • Does this imply government (inaction) is part of the collective criminal group? If so I think that’s fair.

  1. with an extradition agreement with China in place, Australian government doesn’t have to do anything to stop money laundering, Chinese government can stop it on it’s own.

    that’s why I don’t understand why Chinese money launderers are holding properties in Australia for more than few months. They should move the money out of Australia as soon as it becomes “clean”

  2. Can’t we do our money laundering the old fashioned way, and allow our banks set up anonymous no questions asked accounts like the Swiss, and avoid stinking up our property market?

  3. My issue is many likely know they are breaking the law, yet our Government, don’t seem to care, Hence my thought process is, why should I try and do the right thing, if these people obviously aren’t and getting away with it. It’s also implying a stigma on the many likely hard working Asians around, who are also coping flack due to this issue. All the Gov need to do is include a “proof of residency” on purchase, simple, yet obviously the people who control Government, and don’t represent us, think differently.

    • The working stiff gets reamed in this country

      Rates which council can raise with impunity (essentially)
      No land rights (CSG)
      this kind of crap


    • It’s the same as white collar crime.. All of a sudden it’s all too hard to detect, it costs too much to police, insert excuse here. This despite the huge cost to the economy.. When it comes to “street crime” however.. hello big spending government!

  4. Yes, Australia will take definite and strong action on money launderers … by getting them to contribute to the election funds!

    It’s not laundering if it’s donated, isn’t it?

  5. How about the AFP/ATO/ANAO start with an audit of recent residential land title transferees for FIRB residency-status compliance?
    Any word back from the FIRB on yesterday’s referrals Grant?

  6. “Australia must act on money laundering”

    A better lesson is served by completely degrading our concept of citizenship to the point it is valueless.

    We really aren’t citizens any more anyway, we’re subjects.

    If CCP politburo can buy their way in to subjugate us, why not? We shouldn’t eliminate privileging evil to rule over us just because of the colour of their skin.

    If we so embrace evil to rule over us in exchange for property equity, our embrace should be non-racist.

    Let them in, let them f*ck the country over. Let the late-19th century noble experiment of high wage share collapse. The only IR system in the world that confused Lenin (He didn’t understand the human dignity in the Harvester ruling) and changed the criminal dregs of England, to the highest standard of living in the world in 112 years was noble, but you need to be a noble people.

    We’re no longer that, our ancestors starting spawning a plague infestation in 1946, and that spawn plague boomed for nearly 20 years. Any notion of decent humanity died then.

    • You are perhaps over-egging the boomer parasite meme (I would be more focussed on the high priests of the Chicago school), but still pretty funny !

  7. Useless pie eating feds recently busted a bikie trying to smuggle 60k to Noumea, woo hoo. A chinese national investor bought a 15 year old house round the corner from me off market for 2.3 mirron dorrar – about 400k over valued, about 6 months ago. Now the grass is a meter high and weeds are growing in the gutters….

      • Agreed. Let’s see what the FIRB does with this – we can see if the government actually means to do anything about non compliance and money laundering.

        Hard to believe a 2.3 million dollar property is sitting around with no one making use of it, unless it’s a foreign national parking their funds outside of china.

      • its this house: 25 Fredrick St, Oatley, 2223.
        I only know cos the neighbours are blabbing and complaining about the grass and the weeds and that no one has lived there since it was sold off market, actually it was listed, but I can’t see where it was sold
        is that enough proof?

      • Thank you for reporting your concerns around suspected breaches of Australia’s foreign investment rules.

        If you have provided your details to us, we may contact you to seek further information if we need to. Some reports do not include all the information we require and it would be helpful to contact the person who made the report.

        Please note that the FIRB respects your privacy under the Privacy Act 1988. We equally respect the privacy of the owner of the reported property and due to privacy laws we are unable to disclose any information from an investigation or application.

      • Christopher some sites say that others say withdrawn before auction, how do find the agent and who bought it

      • AM, hit me up with an email: [email protected]

        Agent who sold that one (25 Frederick) was Tony Araujo of CityView RE.

        The buyer has a name that implies they are foreign or Asian heritage (could be Aussie of course), but rather not disclose in public (so email if interested in full details). Same buyer (same name, likely same person) bought 2/54 New Beach Road, Darlington Point for $7.2M a week after the property you mention.

      • The Patrician

        “We equally respect the privacy of the owner of the reported property and due to privacy laws we are unable to disclose any information from an investigation or application”
        How is it a breach of privacy if the FIRB confirms that the transaction is FIRB compliant?
        The whole reason public confidence in the system has failed is because no one knows if the transactions are legal or not.
        Surely the purpose of the reforms is to restore public confidence in the integrity of the regulatory system.

      • Stormy WatersMEMBER

        BB – above you mention a property at “2/54 New Beach Road, Darlington Point”…I think you mean Darling Point. It’s postcode 2027 in Sydney, walking distance to the CYC in Rushcutters.

      • @ Robert, “Let’s see what the FIRB does with this.”

        I think it’s safe to say the FIRB will do what they always do. Nothing.

      • Chodley Wontok

        I can neither confirm or deny I bought 25 Frederick S Oatley for $2.05M Oct 2014.
        As for the grass, it is stuff that grows, enjoy.
        Besides, mowing is noise pollution.
        I help reduce traffic congestion & lower electricity use by leaving vacant.
        As to my pretend friends at FIRB, they are very busy doing something probabry.

      • “How do you know they’re chinese national?”

        Because he is a racialist! Lots of naturalised Australians buy multi million dollar houses and leave them vacant. It’s totally legit. Asking questions like these is rashist and you should hang your head in shame! If Derryn Hynch was around you’d be in the shame file!

    • Put up an ‘under investigation’ sign in the front yard, could make for an interesting grass roots campaign.

      • Now this is an interesting idea.

        “Purchase under investigation for breach of FIRB overseas purchase rules. Reported to FIRB.”

      • …and if they won’t come, maybe slip a note under the door at your nearest bikie clubhouse in case they have a productive use for it, such as growing essential crops or manufacturing essential medicines for the sick at heart.

  8. surflessMEMBER

    When there are serious questions about whether our own Politicians (Local, State and especially Federal) are corrupt ie Bronwyn Bishop, political party donations and the failure to have a Federal ICAC, how can stop money laundering?

    • Lol Bronwyn Bishop isn’t corrupt mate, she’s still the speaker of the House with our government complicit in keeping her there! There’s no corruption in Australia mate. No money laundering either!

  9. Cannot threaten Australia’s biggest industry – Property. North Korean’s should study how we do it. Way more effective than being a narco state. Just launder money through property.

    • “North Korean’s should study how we do it.”

      Just a guess, but I don’t think as many people would be interested in moving to North Korea as they would to Australia. Same goes for Afghanistan so best they both stick to the drug trade.

  10. Can’t see it happening. The bases are well and truly covered, even down to the average property journalist in the mainstream media who is more than likely to have a Chinese surname. The proliferation of this has been obvious over the last few years. For the journalistic/media types out there (Gunna et al), a question. Has this proliferation occurred as a result of the relaxed 457 rules (which suspiciously coincided with mass retrenchments at Fairfax etc) or are they simply adding some local Chinese flavour to attract the new target buyer, as many of the real estate agencies have done?

  11. Few politicians can resist getting their ugly faces on TV, showboating about being tough on criminals or poor people. Always makes for good PR. That no one from any side of the fence has been inclined to do so over the years on this issue, probably illustrates just how corrupt the political class is and that there are likely many of them or their corporate or power broking backers benefiting from this money laundering.

  12. Background to Cameron’s announcement – in the UK there was a doco last week on Channel 4 about Russian money laundering in residential property in London.
    Guy with bad Russian accent and young blonde mistress telling estate agents that he was a Russian minister, had stolen money and needed to buy a house “secretly” nudge nudge wink wink.
    Needless to say the land rats were falling over themselves to help him out – and it was all on secret camera. See link
    Replace Russian with Chinese and Melb/Sydney have similar problem – massive money laundering and complicit local estate agents.
    An Aus version of this secret camera doco is crying out to be made here

  13. Leith, very difficult to prove, cost of enforcement likely to outweighs benefits.

    One Chinese province recently proudly announced 1/349 citizens a multimillionaire. The province has a population in excess of 50 million. Lots of potential purchasers, probably legit!

    • How are they completely legit if China limits the amount of external currency they can transfer on a yearly basis?

    • How are they legit? They are Chinese nationals, in China, with no pretence to Australian residency.

      The only legit ones are the approximately 800k resident Australians who are either Chinese born or who claim Chinese ancestry. All others, not being Australian, illegitimate.

    • “Leith, very difficult to prove, cost of enforcement likely to outweighs benefits.”

      Garbage. If the financial industry can do it, then the real estate industry can too.

    • I’m talking about the question of money laundering. Very difficult to prove particularly when proceeds have been generated by businesses conducted offshore, businesses that no doubt present as legitimate enterprises. Crikey, even Xi’s own selective crackdown has only netted relatively small numbers and I’d suggest the CCP has better resources on the ground than whatever Australian body would be charged with overseeing or testing legitimacy criteria.

      • If it’s difficult to prove, then why bother having AML laws? Why don’t we just stop the pretence and just give foreigners open slather? It’s what is happening anyway, and our govt and FIRB don’t even bother trying to enforce anything. We all get hot under the collar reading about it and feeling helpless and outraged, but FIRB employees and politicians on both sides sleep well at night.

  14. Mining BoganMEMBER

    Something I read yesterday that I agree with is that nothing will be done unless it’s proven that criminal gangs are using Oz RE to launder money that is then used to fund terrorism. It’s the only crime worthy of condemnation in Australia, even if it is only a mixed up kid with a plastic sword.

    Anything else will just be passed by with a wink and a nod.

    • This iis absolutely the case, and is why my 3 daughters ain’t being raised in the sad corrupt nation that is Australia.

  15. Every Friday night an “Auction Today” sign should appear on a randomly chosen Goverment officials’ lawn. Until they are inconvenienced themselves with hordes of suitcase carrying immigrants, they’ll just let it go on. Criminal!

  16. WHo was the person yesterday who mentioned the website

    Oh yes, your original question Leith/UE

    “One wonders how long the Australian Government can continue to ignore this issue.”


    • Yes, unfortunately that’s correct. The government have made it very clear that they will continue to ignore this phenomenon.

      Seriously, what are we to do when we the people are up against two sides of government who are complicit in turning a blind eye?

  17. Not while they’re supporting the housing bubble. In Melb at the moment staying in an appartment block that’s a mix of residential and hotel units, was the only person in the elevator with 7 others who was not Asian.

  18. Nothing will change as it’s part of the government’s business model. No laundering means less taxes and less foreign capital = collapse on their watch.

  19. I was looking at Domain yesterday. There are 8759 apartments for rent in the Sydney region (within ~30K radius of the city). That’s a lot of apartments. Wonder what this number was like 10 years ago? and note that we’re going to get more within the next 12 months. If you’re young and don’t mind renting, the choice is obvious. On one hand you can rent (and the way things are going, there’s quiet a bit of choice and options) and on the other hand you can tie yourself to a huge mortgage to buy a badly built shoe-sized apartment and spend the rest of your adult life paying the mortgage.
    Apparently, Sydney vacancy rate is around 1.9%. That means the size of the rental market (apartments only) is around 875,900 apartments.

  20. Wake up Australia.

    The Aussie govt know exactly what is going on.
    And they are willingly Allow it to continue all via INACTION.
    This is not just liberal … It is ALL of them.
    They all have a vested interest in allowing illegal foreign property investment. Ask Nick Xenophon how many investments he has, or all of them for that matter. The FIRB in reality stands for Fucking Idiotic Rort of Below-Average public.
    These bastards have willingly allowed people to invest invest invest in a market that adds no long term fiscal/economic benefit to Australia.
    All it has done is price youth out of the market, kill a once-realistically achievable dream…they have murdered that.
    When my kids ask me “did people used to be able to afford homes? Wow that’s amazing!” I will feel like crying.
    Rotten bastards.
    Australia – backward, visionless, serves one.