In 2006, Australia and the global Financial Action Taskforce (FATF) agreed to establish “tranche 2” anti-money laundering (AML) laws targeting non-financial assets (in particular property).
Ever since, vested interests across the real estate, legal and accounting professions have vehemently fought against this AML legislation.
As a result of this opposition, stakeholder consultations in 2008, 2010, 2012, 2014, and 2017 ended in the Australian government repeatedly delaying the implementation of these global AML rules, which were deemed “too harsh” by both Labor and Liberal administrations.
In turn, Australia is now one of only three nations in the world without tranche 2 AML requirements pertaining to non-financial assets.
And Australian property has become a global magnet for dirty money, especially from China.
“Unfortunately, when we look at these organised crime schemes more than half the money moves through real estate in Australia”, Financial crimes expert Nathan Lynch told Michael West Media (MWM).
“In Australia accountants, real estate agents and lawyers for 16 years have not been required to do any checks whatsoever as to the source of the wealth that people are moving into property purchases”, said Lynch.
“In Australia, you can buy and sell property through an entity, which may conceal the true identity of the owners. Without anyone asking where the money comes from, it’s very easy to introduce illicit money into the system”, said Milan Cooper, the CEO of a New Zealand-based AML/CTF technology company First AML.
A Spokesperson for the Attorney-General told MWM that the Albanese Government is mulling the previous parliament’s review into the tranche 2 AML laws.
“The Government is now considering the findings of that inquiry and will respond in due course”, the spokesperson said.
The Albanese Government is under pressure to stop delaying, with experts claiming the government’s inaction risks turning Australia into a “global pariah” and making our property the go-to destination for illicit funds.
“It’s time to act because it’s becoming embarrassing, and there’s a risk that Australia is put on the grey list by the Financial Action Task Force, which oversees these regulations around the globe”, says Cooper.
Lynch agrees, noting “it’s astounding that Australia has said for 16 years to the international community ‘yes yes we’re fixing this’ and yet every government has kicked the can down the road”.
NSW Greens senator David Shoebridge recently called on the Albanese Government to stop procrastinating and immediately implement the tranche 2 AML laws.
“Australia is known to be an attractive destination for foreign proceeds, particularly corruption-related proceeds flowing into real estate, from the Asia-Pacific region”, Shoebridge said.
“Despite calls from Australia’s crime-fighting agencies and increasing international pressure, we still have no commitment from the federal government to implement tranche 2 anti-money-laundering laws this year”.
“Whether it’s buying a trophy home in Sydney’s north or an up-zoned apartment block in Parramatta, the lack of financial transparency required from lawyers, accountants and real estate agents is driving up prices and hiding ill-gotten gains”, he said.
Will the Albanese Government finally implement the tranche 2 AML laws as promised by Australia nearly 17 years ago?
Or will Labor continue to allow our real estate sector to serve as a shelter for dirty money from abroad?
Enough stalling. The money laundering loophole in Australia must be closed once and for all.
