Global Plight: Australia Paves the Way for Money Laundering in the Property

Richard Marley

April 13, 2023

Australia facilitates money laundering through the property, causing a global plight and perpetuating Australian black economy.

Several anti-money laundering laws, including those targeting non-financial assets (mainly property), were developed in 2006 by Australia and the Global Financial Action Taskforce (FATF).

Since then, legal, accounting, finance, and real estate representatives have vigorously fought against this AML legislation. Both Labor and Liberal governments deferred the implementation of these global AML rules due to opposition in stakeholder consultations held in 2008, 2010, 2012, 2014, and 2017.

As for now, Australia is among the three nations without tier 2 AML regulations applicable to non-financial assets worldwide. This has paved the way for illegal activities as a catalyst and the plight of dirty money globally, especially from China.

Addressing the issue, Financial crimes expert Nathan Lynch stated to Michael West Media (MWM), “Unfortunately, when we look at these organised crime schemes, more than half the money moves through real estate in Australia.”

Lynch further added, “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.”

Addressing the issue, Milan Cooper, CEO of New Zealand-based anti-money laundering and counter-terrorist financing (AML/CFT) company First AML, said, “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 effortless to introduce illicit money into the system.”

According to a spokesperson for the Attorney-General, the Albanese government is considering reviewing the previous parliament’s Tier 2 anti-money laundering legislation. The Attorney-General spokesperson added, “The Government is now considering the findings of that inquiry and will respond in due course.”

Australian experts say inaction by the Albanese Government could make Australia an international pariah and make the property the go-to destination for illegal activities and illicit funds.

Referring to it, Cooper said, “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.”

To which financial crimes expert 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”.

AML laws in tier 2 should be implemented immediately, said NSW Greens senator David Shoebridge; he further added, “Australia is known to be an attractive destination for foreign proceeds, particularly corruption-related proceeds flowing into real estate, from the Asia-Pacific region,” and “Despite calls from Australia’s crime-fighting agencies and increasing international pressure, we still do not commit the federal government to implement tranche two anti-money-laundering laws this year”.

As a result, the question arises whether Albanian legislation on anti-money laundering will finally be implemented as promised by Australia nearly 17 years ago. Or could Labor continue to allow dirty foreign money to be sheltered in the real estate sector? Considering this, a permanent solution must be found to Australia’s money laundering loophole.

Do you want to see how fast and accurate our verification solutions are?

Request Demo