I never thought I’d see the day that Australia’s real estate lobby – the Real Estate Institute of Australia (REIA) – supports Australia’s anti-money laundering (AML) regime being extended to real estate gatekeepers, provided offshore sales offices and websites are also captured. From The AFR:
Real estate agents with offshore sales offices and websites targeting foreigners are at higher risk of attracting money launderers and should face tougher laws, according to the industry itself…
The REIA backed the new rules but complained that they need to cover offshore sellers too… in a submission to the Attorney General’s department…
“On-line platforms for sales and auctions, by their very nature, will pose a greater risk for any anti-money laundering scheme regime than traditional real estate businesses and would need to be included in any future scheme,” the REIA said.
“In addition, there are a number of overseas portals selling Australian real estate including new off-the-plan developments to foreign residents. These too would need to be part of any proposed anti-money laundering scheme”…
A submission by Mark Zirnsak of the Uniting Church argued that including real estate agents in anti-money laundering rules “would spread the compliance burden more fairly between Australian businesses, reducing the risks faced by financial institutions in dealing with transactions involving real estate professionals”.
…it highlighted a “significant risk” of money laundering via real estate agents with China-based offices or targeting Chinese buyers. It gave as examples ASX-listed McGrath’s global agent, Savills and a website called Woobuyers, which targeted Chinese buyers. The English-language version of the site promises, “We help you reach cashed up Chinese property buyers.”
Good to see. In case you are new to this topic, legislation to implement the second tranche of anti-money laundering (AML) legislation covering real estate gate keepers has been gathering dust for nearly a decade despite explicit criticism from the global regulator, the Paris-based Financial Action Taskforce (FATF), that Australian homes are a haven for laundered funds, particularly from China, as well as similar warnings from Austrac.
In the meantime, dodgy Chinese money has piled into Australian property, in the process inflating house prices and pricing young Australians out of home ownership.
The Federal government claims it wants to finalise the new AML rules by the end of this year. However, it set similar deadlines 2008, 2010, 2012 and 2014.
As noted by Australia’s best investigative journalist, Michael West, in January:
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.
In other words, we’ll believe it when we see it.
