Coalition re-opens door to money laundering visas

Back in March, Atlas Advisors Australia wasted no time in using the COVID-19 pandemic as an excuse to lobby the Morrison Government to open the floodgates to Significant Investor Visas (SIV) – affectionately known as “Golden Ticket Visas”:

About $100 million could provide a lifeline for start-ups and emerging companies crippled by the coronavirus if applications under the Significant Investor (SIV) program were reopened.

Leading SIV funds manager Atlas Advisors Australia has called on the federal government to reopen approvals and give priority to fast -track urgent applications.

Atlas Advisors executive chairman Guy Hedley said applicants should be able to execute investments while delaying physical stay in Australia until travel restrictions are lifted.

“Reopening approvals under the SIV program would fulfill the program’s original intent to support thin capital markets,” Hedley said.

“Atlas Advisors Australia has allocated more than $40 million to early stage venture capital investors from SIV investors.”

Six months on and the Morrison Government is more than happy to oblige:

20 September, 2020 Media release

Australia re-opens its doors to investment from high net worth migrants

Leading wealth manager Atlas Advisors Australia has commended the Australian Government for listening to the needs of business and the economy by recommencing the issuance of 188 visas and allocating interim places prior to the Budget under the Business Innovation and Investment Program (BIIP).

Executive Chairman of Atlas Advisors Australia, Guy Hedley said the states and territories, including important business centres of NSW and Victoria, had taken the important step of opening their doors to applicants to the 188C Business Innovation and Investment visa following the Australian Government’s interim allocation of places.
“We commend the Australian Government and the states and territories for recognising the important role business migration plays in driving our economy,” Mr Hedley said.
“This will have a tremendous impact on the post-pandemic recovery of business. It will assist Australian businesses and entrepreneurs to counter the lack of availability of domestic capital investment.
“We encourage the Australian Government to go further by prioritising its review of the BIIP to maximise the benefits to the economy in a post-pandemic era.”
Mr Hedley said the doors to the country were just reopening, yet Atlas Advisors Australia already seen a dramatic increase in interest from high net worth migrant investors including from destinations such as Hong Kong.
“Hong Kong is a vibrant business destination with many rich and highly experienced entrepreneurs and businesspeople,” he said.
“These migrant investors are keen to help stimulate business and employment through ventures in their new homeland.”

The Productivity Commission (PC) has previously called for the SIV program to be axed altogether, arguing that SIVs provide minimal if any net economic benefits and likely help fuel fraud and money laundering:

Because there are no English-language requirements for the Significant Investor Visa and Premium Investor Visa, and no upper age limits, it is likely that these immigrants will generate less favourable social impacts than other immigrants. Further, compared to other visa streams, investor visas are prone to misuse and fraud. Concerns about visa fraud played a part in the Canadian Government’s decision in 2014 to scrap its investor visa scheme…

There is a risk that SIV and PIV might be used as a pathway for investing ‘dirty money’ in Australia, an issue that has been raised for other similar schemes (Sumption and Hooper 2014)…

Overall, the case for retaining the Significant Investor Visa and Premium Investor Visa streams is weak and the Government should abolish these visas.

It’s easy to see why. These ‘Golden Ticket Visas’ are touted widely to wealthy investors seeking multiple residencies and tax regimes:

For these reasons, the United Kingdom in 2018 abolished their version of SIVs because they were being used for money laundering purposes and were not providing public benefits:

Ministers are halting a “gold-plated” visa scheme offering foreign investors a fast-track to settling in the UK, as part of a crackdown on financial crime…

“We will not tolerate people who do not play by the rules and seek to abuse the system,” said Immigration Minister Caroline Nokes, announcing the suspension would come into effect at midnight on Friday.

…the Migration Advisory Committee said the scheme brought little economic benefit for British citizens…

Through the SIV, the Australian Government has created a program where citizenship is for sale to anyone with enough money to pay. There are few questions asked. There is no rigorous background checks on the applicants or the sources of their money. There is no requirement to speak English. And there is no requirement for the applicants to work or contribute to Australian society.

Instead of listening to the impartial recommendations of the PC and abolishing SIVs, the Morrison Government instead sided with the rent-seekers.

That’s pretty much par for the course in Australian policy making these days.

Leith van Onselen
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Comments

  1. Hill Billy 55MEMBER

    ABC had a report this morning showing how rife money laundering is. No wonder SFM is defunding them.

  2. From my experience SIV “investment” doesn’t invest in anything productive any more than the locals do. Getting investment for something actually innovative and manufactured here in Australia is an unbelievable gauntlet run. We are now piloting a world-beating medical device to a global Med tech company in the USA and are in the stages of engineering a deal with one of the top 5 HCIT companies on earth, yet we could have died in the erse 20 times over looking for funding in the “clever country”.

    • There’s very little funding available for productive endeavour in this country as long as the property parasite remains the dominant capital-suck in this country. When a wealth advisor does a presentation to investors on the next property development everyone’s all ears. Anything productive, you may as well be speaking to the wall.

      • I wouldn’t have believed that it was this bad, but I’ve seen it too many times. Not only that, but the VCs prey on the captive locals rather than support them. Perhaps the business will fall over while waiting for partnership, but we have an amazing little device in a white-hot market. It might be more likely that the HCIT company buys us for a song and takes the manufacturing right out of Australia.

        What’s going to be here for our kids?

        • That’s why I’m so keen for a reset right now – for the next generation’s sake. Instead, we’ll get policies that bake in a slow death and a really challenging future for our children. Instead of them following their career dream, I’ll be strongly pushing them toward essential services, or the like.

      • While you are generally right, it’s a bit more complicated than that. The reality is, in Australia losing money on anything is seen as a sign of failure (whether you are investor or an investment manager) so no one really takes genuine risks and certainly not those with long payoffs.

        That means that no one really knows how to assess the value of the sort of thing you are looking because there is little expertise here to do it.

  3. Arthur Schopenhauer

    Pure unadulterated Bullsh!t. Let’s bring in corrupt people, from corrupt countries to better our corrupt ruling class.

    Bullsh!t.

    Bullsh!t.

    Bullsh!t.

  4. SIV as in “leaks like a Sieve”.
    So how many will be issued at what “face value”?
    Will a list of approved applicants be published on the public record anywhere?
    Will we be able see where the investment goes and measure some actual metrics (jobs created)?
    Do we need foreign capital or could we instead lend through our own banks?
    How does this benefit the average Australian?

  5. happy valleyMEMBER

    Continuation of “user-friendly” money laundering flexibility appears to be a given for federal politicians of whatever ilk?

  6. You need to consider the greater good, the big picture: every time a foreign crook is given a visa to settle in Abbottabad, both the global and local corruption rankings fall .

  7. I’m sure since they’re “high worth individuals”, they won’t have to observe quarantine either.

  8. So this is basically for the rich in the Hong Kong and in the China to escape, while leaving their country men to face oppression and misery. just confirms the country is full of cowards that would rather run than fight to make a change.

  9. All the stockbrokers offer a SIV service. As far as I can tell, the investment doesn’t have to be in a local ‘productive’ company. The SB just incorporates a domestic company into which the funds are paid and then invests in any old financial assets. That way, the visa applicant is officially investing in a ‘local’ business.

    Happy to be corrected.

  10. Stewie GriffinMEMBER

    Australia re-opens its doors to investment from high net worth migrants

    So we should think of ourselves as high class prostitutes? Trouble is it won’t stay that way for long though… never does.

  11. Claude BradingMEMBER

    “iProsperity” and the circumstances around its collapse tell you everything you need to know about what is wrong with the SIV scheme.

    Bluegum plantations, SIVs, etc – creating a system that incentivises investment on a basis other than the commercial merits of the investment never ends well.

  12. We are gonna get double down on neoliberalism from here on out. Inequality set to worsen also. Unless we can get the Anti BS party in.

  13. Holders of Australian SIVs are allowed to “invest” in established, second-hand real estate, as well as new. No questions asked. No requirement that anyone actually live in the properties. They are used primarily as land banks to launder money and illegal funds. Canada as well as the UK have stopped shelling them out for that very reason.