On the whole, this Bill makes sensible and progressive reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.
But this Bill is remarkable far more for what it isn’t than for what it is.
This Bill demonstrates, once again, this government’s failure to act on what is universally understood to be the big problem with Australia’s AML/CTF regime, namely the failure to list real estate agents, accountants and lawyers as designated services—the fable Tranche 2 reforms.
Australia is now one of only six countries in the world not to have closed the property loophole, alongside the United States, China, Mongolia, Madagascar and Mauritius.
AUSTRAC estimates that $1 billion in suspicious transactions flowed through the Australian property market from just one country, China, in just one year, 2016. But AUSTRAC is hamstrung because it has little oversight of the three professions that most facilitate this activity.
This government has failed to close the property loophole despite:
The explanatory memorandum to the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 forecasting a ‘second tranche’ of legislation that would include real estate agents, accountants and lawyers as designated services under the Act.
In April 2016, the Government releasing the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 which recommended that the Government develop options to regulate real estate agents, accountants and lawyers under the Act.
The Financial Action Task Force’s April 2015 Mutual Evaluation Report on Australia’s progress in combatting money laundering and terrorist financing stating that Australia is an attractive destination for foreign proceeds of crime, particularly corruption-related proceeds flowing into real estate.
Recommendation
The government introduce legislation that would include real estate agents, accountants and lawyers as designated services under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.