Australian property seen as hot destination for money laundering

The Financial Action Task Force (FATF), an international watchdog on money laundering and counter-terrorism financing has just released a report that Australia is becoming an hot destination for money laundering particularly in property dealings. Whilst financial institutions such as banks are subjected to the reporting requirements administered by Austrac, other cash dealers that come under a category called Designated Non-Financial Businesses and Professions (DNFBP) such as gambling places, real estate agencies, precious metals and stone dealers etc and Lawyers, notaries, other independent legal professionals and accountants are not effectively monitored.

Some of the real estate companies, law firms and accounting firms structure their operations to transcend borders. When not monitored properly by institutions such as PNG Financial Intelligence Unit and Austrac, these DNFBPs can easily be turned into instruments of crime. Imposing reporting obligations on DNFBPs and monitoring their transactions would help curtail illicit capital flights across our common borders.

The Report says most of the funds originate from proceeds of corruption in the Asia Pacific region which includes PNG. Just in Cairns alone, PNG owned properties account more than 100 properties. Whilst others are not derived from proceeds of crime, there are some that trace back to corruption proceeds from the victim county -PNG. The Australian authorities have, in the recent past, frozen some of the assets owned by a controversial PNG businessman based on primary investigation conducted by ITFS. Whilst those are commendable effort, we are yet to see a single corruption proceed repatriated back to PNG.

The recent efforts by Australian authorities on Chinese nationals as reported here is commendable. Before Australia goes to China, it passes over a small island nation called PNG that supplies most of the corruption proceeds to its shores. It would be better if PNG was not overlooked for China.

Source: Sydney Morning Herald