Last month I reported testimony from the head of Transparency International Australia (TIA), Serena Lillywhite, to the Senate committee examining money laundering.
Ms Lillywhite claimed “Australia has become the destination of choice for illicit financial flows … which too often end up in the property market” before asking “how much evidence of money laundering in Australia will it take before the law is changed and enforcement ramped up?”.
The following day, representatives from financial crimes regulator Austrac, the Australian Federal Police and the Australian Criminal Intelligence Commission told the Senate hearing that billions is being laundered through Australia’s housing market.
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AFP Deputy Commissioner, Ian McCartney, also said he was supportive of expanding the anti-money laundering (AML) regime to encompass real estate agents, accountants and lawyers, saying there was evidence that individuals in the three ‘gatekeeper’ professions had been knowingly involved in money laundering.
As MB has documented for years, the AML circus has been going on for 15 years.
When I worked at the Australian Treasury between 2003 and 2006, the global anti-money laundering (AML) regulator, the Financial Action Task Force (FATF), developed AML rules which Australia committed to implementing in 2006. Some of my Treasury colleagues in the International Economy Division worked directly on the issue.
Fast forward to 2021 and we are still waiting for the Tranche 2 AML rules to be applied to real estate gatekeepers (i.e. real estate agents, accountants and lawyers). Over that time, Australia has become one of the world’s worst laggards on AML and our property market has become one of the worst havens for dirty money.
The federal government already conducted stakeholder consultations on AML in 2008, 2010, 2012, 2014, and 2017. And each time, under both Labor and Liberal governments, the rules were put into the ‘too hard’ basket and postponed. Why? Because of push-back from vested interests negatively impacted by the reforms.
Now MichaelWest.com.au has taken aim at the AML farce, describing Australian property as a “Smugglers’ nest” for dirty foreign money:
If you reckon they are dithering in Canberra over a federal corruption commission (promised three years ago), get a load of this:
Senator Nick McKim: Thanks, Mr Pezzullo (Secretary, Home Affairs). Just to be clear: 15 years after Tranche 2 (of money-laundering laws) was first promised, and five years after the statutory review of the act recommended that Tranche 2 be implemented, the government has now recommissioned a cost-benefit assessment that has already been done once. Is that what you’re telling the committee?
Mike Pezzullo : It was done at a point in time with certain parameters and working assumptions. Yes, we’re redoing that work, or I should say we’re having that work redone.
“Parameters” … “assumptions” … “work redone”; waffle, waffle.
We got this super-waffle from a spokesperson five long years ago when asked about the then nine-year delay in introducing Anti-Money Laundering/Counter Terror Financing laws:
A cost/benefit analysis of extending AML/CTF regulation to certain non-financial business (lawyers, conveyancers, accountants, real estate agents, trust and company service providers and high-value dealers) is well progressed and will be completed by July this year.
The outcome of the cost-benefit analysis will inform the government’s decision on the regulation of tranche two entities under the AML/CTF Act.
What have we got here, the Iliad and the Odyssey of cost-benefit analyses? No, it’s just covering up for inaction, prevarication. There may be no cost-benefit analyses at all. We have surely never seen one nor heard of somebody who has.
Governments of both stripes have been hemming and hawing for 15 years over the introduction of money-laundering laws, laws which would stem the flood of black market money into Australia’s property market; laws which would finally drag this nation into line with global standards on AML-CTF (that’s the regulatory vernacular for Anti-Money Laundering and Counter Terrorism Financing).
Yet thanks to lobbying and political donations, thanks to the government’s complete failure to stand up to powerful vested interests – lawyers, accountants and property developers – we are still waiting for Tranche II, laws supposed to be enacted by 2008.
The parallels with Samuel Beckett’s play Waiting for Godot ring loud…
Expect the Tranche 2 AML reforms to be postponed yet again, stamped out by the vested interests. In turn, Australia will remain one of only three countries in the world left to implement tranche two of the AML laws recommended by the global FATF.
The whole farce shows the corruptive hold that the property industry has over our political system.
In the property narco state of Australia, always bet on corruption winning every time.