Australia Lags Behind in Extending FATF’s AML/CFT Recommendations to DNFBPs

  • Richard Marley
  • April 05, 2021
  • 2 minutes read
  • 378

Australia is sending a signal to welcome global financial criminals for business in its lawyers, accountants, and property market. 

Australia is known to play a part in the laundering of USD 2 trillion every year, assisting the criminals in legitimising their profits gained through illicit activities like human trafficking, drug dealings, smuggling of arms, exploitation of minors, and political corruption. 

Australian Federal Police and the financial watchdog, AUSTRAC, are working towards gathering proof that lawyers, accountants, and real estate agents are actively taking part in the criminal activity taking place in Australia.

Australia has neglected international obligations that require the extension of AML/CFT measures to DNFBPs (designated non-financial businesses and professions) for fifteen years. Australia instead has Tranche 2 reforms that are yet to be passed and have languished in Home Affairs. 

The Financial Action Task Force (FATF) has given some guidelines to its member states regarding the DNFBPs. Australia is one of the only six countries that defied all three recommendations by the FATF for DNFBPs. Australia has surpassed New Zealand and Singapore in the Global Corruption Perception Index.

Australia has failed to pass the Tranche 2 legislative measures. The discussion regarding these reforms was supposed to be held in February in FATF’s plenary. However, the delegation for FATF’s Plenary was led by the Home Affairs instead of the AUSTRAC. The political masters in the Department of Home Affairs are developing an international relationship with the FATF while AUSTRAC has been left behind

The AUSTRAC has successfully delivered up to AUD 2 billion of penalties for taxpayers who have violated AML regulation in the past three years and yet the Home Affairs department is neglecting the establishment in developing critical relations with the FATF. 

New Zealand has also surpassed Australia in developing a framework for identifying money laundering and regulating the DNFBPs. The country realised that financial crime can cost legit businesses too much and passed both trances of its AML/CFT measures while Australia’s policymakers have been far left behind. 

This has given financial criminals around the world a clear message that Australia’s financial watchdog has been silenced and the lawyers, accountants and property market can now be misused for business.