Austrac: Money laundering inflating property values

The CEO of AUSTRAC – the Australian Government agency responsible for detecting, deterring and disrupting criminal abuse of the financial system – has again warned that Australian property is being used to launder illicit funds:

Austrac has warned that laundering the proceeds of crime through property purchases can drive up prices and keep legitimate buyers out of the market…

[It] warned of “widespread or concentrated real estate purchases with the proceeds of crime, driving property prices up and pricing legitimate buyers out of the market”.

“Serious and organised crime groups can use real estate as an investment or as a lifestyle benefit to integrate the proceeds of crime into the legitimate economy,” the report said…

“The sale and purchase of real estate presents particular appeal to money launderers looking to conceal large sums of money in few transactions, or who use corporate vehicles and trusts to disguise beneficial ownership.

It feels like Groundhog Day. Fifteen years ago, the Australian Government agreed to implement the Tranche 2 global AML rules for lawyers, accountants and real estate agents in a bid to prevent laundering of illicit funds, especially into Australian property.

However, these reforms have been continually postponed amid fierce lobbying by shadowy “vested interests” negatively impacted by the reforms. This has led to Australia having the weakest AML rules in the world pertaining to lawyers, accountants and real estate agents:

Australia’s intransigence has seen a conga-line of international authorities – including the Paris-based Financial Action Taskforce (FATF) and Transparency International – deride Australia’s failure to act, which has continually fallen on deaf ears within the federal government.

Accordingly, Australia has been cemented as a money laundering safe haven, with property the go to choice for illicit foreign funds.

Nothing will change because our corrupt politico-housing complex.

Unconventional Economist
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Comments

  1. Camden HavenMEMBER

    This will never change if left to our pollies so I have stopped being sickened by these types of corruption. Australia is a corrupt nation compared to the Australia I grew up in, that is just the way it is, time to move on let someone else have a go.

  2. Nooooo…..say it isn’t so:))
    How much do private companies & their staff get paid to work this out. Myself & a million other self thinking folk could’ve told them the same for FREE:))

  3. Even StevenMEMBER

    A gaping hole in money laundering, making all other efforts essentially useless. If it pisses us off, imagine how the good people at AUSTRAC must feel… all of their other work for naught.

    • Austrac need to get the message cutting through to woke gen y and gen z supporters of Big Australia. It’s not racist to call out money laundering. If only the average person can understand how it all hangs together to drive real estate higher then it is possible to shift perception and politics.