In 2015, the global anti-money laundering (AML) regulator – the Paris-based Financial Action Taskforce (FATF) – released its mutual evaluation report which found Australian homes are a haven for laundered funds, particularly from China, and urged the Australian Government to implement the second tranche of AML legislation covering real estate gate keepers, which has been stuck in limbo for a decade.
Then in March this year, Transparency International ranked Australia as having the weakest anti-money laundering laws in the Anglosphere, failing all 10 priority areas.
Over the weekend, Michael West reported that Australia has been placed on a watch list by FATF for failing to comply with money laundering and terrorism financing reforms:
Canberra has been dragging the chain for nine years while the powerful lawyers, accountants and real estate lobby groups keep successive governments mired in a consultation process…
Besides tightening the screws on launderers and financiers of terrorism, the importance of these laws are that they could take steam out of the property market and address, albeit only in part, the crisis in affordability for first home buyers…
When asked how Australia’s compliance with international standards was coming along, the communications officer for the Financial Action Task Force (FATF), Alexandra Wijmenga-Daniel, told michaelwest.com.au:
“Following its mutual evaluation, Australia was placed on enhanced follow-up and is reporting back to the FATF on an annual basis concerning the progress it has made to address the deficiencies identified in its mutual evaluation report”…
The FATF expects countries to have satisfactorily addressed most, if not all, of their technical compliance deficiencies by the end of the 3rd year after their mutual evaluation report has been adopted. Australia would be expected to have reached this stage by June 2018″…
In the classroom of international compliance, this is the equivalent of nose-in-the-corner-at-the-back-of-the-classroom status. “Enhanced follow-up” and “deficiencies”.
The reason the process has meandered on for so long is clearly because the stakeholders involved: the accountants, lawyers and real estate lobbies, don’t want it to happen.
And now government is in a bind. If it stems the flow of Chinese capital it might prick the property bubble…
This process of sham consultations and stonewalling has dragged on far too long. It’s almost as if the Australia Government prefers to cooperate as a launderer of corruption and dirty money than deal with the negative effects on young first home buyers.
