For several years, this site has lobbied the federal government to extend Australia’s anti-money laundering (AML) regime, which currently only extends to financial institutions, to real estate gatekeepers including realtors, lawyers and accountants.
These “second tranche” of AML rules have been in limbo since the federal government first promised to bring them into the regulatory net in 2003, and were recently deferred indefinitely by the Turnbull Government. This came despite explicit criticism from the global regulator, the Paris-based Financial Action Taskforce, that Australian homes are a haven for laundered funds, particularly from China, as well as similar warnings from Austrac.
The end result is that realtors, lawyers, accountants and other real estate gate keepers are currently exempted from AML requirements. And this exemption has provided an easy avenue for foreign buyers to launder funds through Australian property.
Perversely, if somebody wants to set up an account to place a $100 bet at Sportsbet, or invest $1,000 into a managed fund, then they must provide sufficient identification under the AML Act. But if they want to launder millions of dollars through an Australian home, few questions are asked. It makes absolutely no sense.
The obvious conclusion from this policy malfeasance is that the Australian Government is tacitly complicit with the dirty foreign money flooding into Australian property. The Coalition has already shown its hand in deferring the implementation of the second tranche. But Labor and The Greens have also been conspicuously silent on the whole AML issue.
Australia’s best investigative journalist, Michael West, has been on the federal government’s case, noting the following in January:
We have just entered the ninth year of equivocation by assorted governments over anti-money laundering laws which should have been fully implemented by now. The first tranche of AML-CTF (Anti-Money Laundering and Counter-Terrorism Financing Act) legislation was introduced in 2006.
The second was supposed to be enacted in 2008. For the sake of stating the obvious, it is now 2017. The past eight years has been a dither-fest, a shaggy-dog story of ‘finalising industry reviews” and “consultation with stakeholders”, a festival of stonewalling…
The Chinese certainly have found a stable place to park their money, so stable it is supine; and things don’t look like changing any time soon, despite pressure from international authorities to properly implement the AML-CTF laws.
And yesterday, West turned satirical to attack the government’s willful neglect of AML reform, which now represents something out of Yes Minister:
We rang up the government yesterday to find out how its long-awaited money-laundering legislation was coming along. This is a biannual affair: a call to the relevant minister, a call to the relevant department and a call to money laundering agency Austrac to ask why the Anti-Money Laundering and Counter-Terrorism Financing legislation, which was supposed to have been introduced nine years ago, had still not been enacted.
“No comment” was the response from the Minister for Justice Michael Keenan. His Opposition counterparts have been equally pathetic over the years. Nobody wants to mess with the sacred cow which is Australia’s property market, or the lawyers, accountants and property spruikers who launder the money for that matter…
There is no other way to treat this issue but as a total joke…
What is going on?
“The Government is closely consulting with industry on regulation models for tranche two entities”.
But you have been closely consulting with industry on regulation models for tranche two entities for almost a decade…
Industry consultation papers were posted on the Attorney-General’s Department’s website in December 2016 with a deadline of 31 January 2017 for submissions.
Another deadline? Is that like the deadlines of 2008, 2010, 2012 and 2014?…
You get the idea. This sorry saga has been dragging on for more than a decade with no end in sight. In the meantime, dodgy Chinese money continues to pile into Australian property, to the chagrin of the global AML regulator, the Financial Action Taskforce (FATF). In the process, young Australians are being priced-out of home ownership, in part due to hot Asian money.
This farce has dragged on far too long. Our politicians simply must end more than a decade of neglect and bring Australia’s real estate gatekeepers into the AML net – as demanded by FATF and Austrac, promised by the federal government in 2003, and intended when the AML legislation was first drafted in 2006.