Senator Nick Xenophon has called for Australia’s money laundering laws to be strengthened, claiming that the nation’s casinos and poker machines are being used as a “high-speed washing and drying service”. From The AFR:
…a Chinese-Australian businessman allegedly washed $850 million through Melbourne’s Crown Casino.
Senator Nick Xenophon told The Australian Financial Review while this case involved a large sum of money there were other instances of money laundering that flew under the regulator’s radar because they involved smaller amounts.
He highlighted the need for anti-money laundering reform, including by lowering the reporting threshold to $1000 from the current $10,000 and monitoring poker machines for large turnovers, not just winnings.
“Around Australia today money laundering is taking place using pokie machines. If you’ve just done a crystal meth deal, you could launder proceeds of that through the pokies, because the reporting requirements are so anaemic,” he said.
“It’s about the casinos and pokies being used to provide a high-speed washing and drying service.”
Here’s an idea, Nick. Rather than worrying about casinos – where anti-money laundering (AML) rules are already in effect for large cash transactions – how about your turn your attention to Australian real estate, which is a haven for laundered funds and currently has no rules in place to prevent it?
The Paris-based Financial Action Task Force (FATF) last year released a scathing report highlighting that Australian residential property is a haven for international money laundering, particularly from China, and recommended that Australia implement counter-measures to ensure that real estate agents, lawyers and accountants facilitating real estate transactions are captured by the regulatory net.
FATF’s findings were then backed-up by the Australian Transaction Reports and Analysis Centre (AUSTRAC), which warned that “laundering of illicit funds through real estate is an established money laundering method in Australia”.
And in May this year, the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was released, which among other things called for the extension of AML to non-financial gatekeepers like real estate agents, lawyers and accountants.
Yet despite these warnings, the second tranche of AML regulations capturing real estate agents, accountants, lawyers, and other non-financial businesses have remained in limbo in Australia since we first agreed to implement them in 2003, and have since been delayed indefinitely by the Australian Government.
As noted last year by Nathan Lynch, Head Regulatory Analyst for Australia & New Zealand at Thomson Reuters:
AUSTRAC’s surveillance efforts are… being frustrated by the fact that money launderers will often use unregulated entities as a “first point of contact” to help disguise their source of funds. If a criminal makes a suspicious cash deposit into a real estate agent or lawyer’s trust account, for example, the suspicious transaction is not required to be reported to AUSTRAC. Reporting entities, such as banks, are required to report transactions of this type within three business days of forming a suspicion. Lawyers are only required to report threshold transactions under the legacy Financial Transaction Reports Act 1988, not suspicious matters, while real estate agents have no reporting obligations.
Separately, Lynch noted that Australia’s “politicians have been conspicuously evasive on their bipartisan commitment to follow through with a second tranche [of the AML legislation]… politicians are happy to turn a blind eye”.
C’mon Nick. Do the right thing and pressure your parliamentary colleagues to implement the AML second tranche to stop young Australians from being priced out of home ownership by illegal foreign raiders.
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