Review Recommends Anti-Money Laundering Rules for Real Estate
Last year, the global regulatory agency against money laundering - the working group Paris-based Financial Action Task Force (FATF) - has published a critical report emphasizing that residential property in Australia is a haven for the international money laundering, particularly China, and recommended that Australia implement countermeasures to ensure that real estate agents, lawyers and accountants to facilitate property transactions are captured by the regulatory network.
FATF conclusions are saved by the statements of operations in Australia and Analysis Centre (AUSTRAC), who warned that "launder illicit funds through real estate is a method of money laundering created in Australia".
In 2003, Australia decided to carry out money laundering (AML) comprehensive regulation that captured accountants, lawyers, real estate agents and other non-financial companies. However, the second phase of the reform to the fight against money laundering and terrorist financing in 2006, which would have captured these non-financial guards, remained in limbo for a decade, yet has not been implemented by the government. All attempts to adopt legislative measures were put in the "too hard basket" for our policy makers and delayed indefinitely.
As noted last year by Nathan Lynch analysts regulations head for Australia and New Zealand in Thomson Reuters
"AUSTRAC surveillance efforts ... are being frustrated by the fact that money launderers often use unregulated entities as a" first contact point "to help hide the source of funding. If a criminal is a cash deposit suspect in an account of real estate agent or a trusted lawyer, for example, the suspicious transaction need not be reported to AUSTRAC. entities such as banks reporting are required to report these transactions in three days business after the formation of a suspicion. lawyers are not required to report transactions threshold under the legacy of financial transactions Act 1988, no suspicious questions, reports, leaving no realtors reporting obligations ".
Moreover, Lynch said that "politicians were obviously evasive about its commitment of both parties to go through a second tranche of the [AML law] ... the politicians are willing to turn a blind eye."
On Friday, the legislative review of the fight against money laundering and terrorism Financing Act 2006 was published, which among other things provides for the extension of the fight against money laundering (AML) for non-financial guards as real estate agents, lawyers and accountants:
Real estate can be a useful channel for criminals wishing to launder illicit funds for a number of reasons. Criminals can buy a property with large amounts of money, live on the property, renovate the property (the use of illicit money) to increase their value and sell the property at a later date for a capital gain. The last actual ownership of the property can also easily hide.
The increase in the value of real estate market of Australia in recent years has increased the attractiveness of Australia as a place to invest illicit wealth, with high value properties that offer ideal for washing large amounts of illicit funds opportunities. This is particularly the case following the global financial crisis that Australia, with its relatively stable economy, is considered a country that is "safe" to invest or hide the criminal wealth.
AUSTRAC released a policy report in 2015 which highlights some of the common methods of laundering money through real estate, including:
There are other conditions that make the investment of illegal funds in the attractive Australian property sector, including lack of AML / CTF DNFPBs regulations that facilitate real estate transactions, reducing the risk that the customer's identity or source of funds for questioning, and eliminates the risk that the transaction will be reported to AUSTRAC.
Recently there has been much attention in buying real estate in Australia by foreign buyers who try to hide their identity. The House of Representatives Standing Committee on Economics considered this issue in 2014 and recommended that the government is considering the purchase of a residential property by foreign investors as a possible area of research for this review.
Addressing the risk of ML / FT posed by DNFPBs
DNFBPs not regulated under / CTF Act ALD generates a large gap in the AML / CFT regime in Australia that provides opportunities for criminals to abuse the DNFPBs services to launder illicit funds. ..
The extent of AML / CFT regulation to the remaining DNFBPs deliver a number of important benefits:
Recommendation 4.6
AUSTRAC Department and the Attorney General, in consultation with industry, should:
a) Develop options for the regulation of lawyers, conveyancers, accountants, dealers in high-value, real estate agents and providers of trust and company service under the AML / CFT Act, and
b) Conduct a cost-benefit analysis of regulatory options to regulate lawyers, accountants, valuable brokers, real estate agents and trusted vendors and business services under the AML / CTF Act.
FATF conclusions are saved by the statements of operations in Australia and Analysis Centre (AUSTRAC), who warned that "launder illicit funds through real estate is a method of money laundering created in Australia".
In 2003, Australia decided to carry out money laundering (AML) comprehensive regulation that captured accountants, lawyers, real estate agents and other non-financial companies. However, the second phase of the reform to the fight against money laundering and terrorist financing in 2006, which would have captured these non-financial guards, remained in limbo for a decade, yet has not been implemented by the government. All attempts to adopt legislative measures were put in the "too hard basket" for our policy makers and delayed indefinitely.
As noted last year by Nathan Lynch analysts regulations head for Australia and New Zealand in Thomson Reuters
"AUSTRAC surveillance efforts ... are being frustrated by the fact that money launderers often use unregulated entities as a" first contact point "to help hide the source of funding. If a criminal is a cash deposit suspect in an account of real estate agent or a trusted lawyer, for example, the suspicious transaction need not be reported to AUSTRAC. entities such as banks reporting are required to report these transactions in three days business after the formation of a suspicion. lawyers are not required to report transactions threshold under the legacy of financial transactions Act 1988, no suspicious questions, reports, leaving no realtors reporting obligations ".
Moreover, Lynch said that "politicians were obviously evasive about its commitment of both parties to go through a second tranche of the [AML law] ... the politicians are willing to turn a blind eye."
On Friday, the legislative review of the fight against money laundering and terrorism Financing Act 2006 was published, which among other things provides for the extension of the fight against money laundering (AML) for non-financial guards as real estate agents, lawyers and accountants:
Real estate can be a useful channel for criminals wishing to launder illicit funds for a number of reasons. Criminals can buy a property with large amounts of money, live on the property, renovate the property (the use of illicit money) to increase their value and sell the property at a later date for a capital gain. The last actual ownership of the property can also easily hide.
The increase in the value of real estate market of Australia in recent years has increased the attractiveness of Australia as a place to invest illicit wealth, with high value properties that offer ideal for washing large amounts of illicit funds opportunities. This is particularly the case following the global financial crisis that Australia, with its relatively stable economy, is considered a country that is "safe" to invest or hide the criminal wealth.
AUSTRAC released a policy report in 2015 which highlights some of the common methods of laundering money through real estate, including:
- The use of third parties to buy properties
- The use of loans and mortgages (for example, criminals take a mortgage to buy a property and pay off the mortgage with cash lump sum)
- Property values management (ie, criminals buy and sell real estate at a price above or below market value)
- structuring cash deposits to purchase real estate (ie, criminals money deposit below the registration threshold AUD10,000 to different banks and then use these deposits to get a cashier's check to purchase a property)
- The purchase and rental properties, but provide illicit funds tenant to pay rent
- Buying a property using illegal funds with the intention of carrying out other criminal activities in the property, and
- Uing illicit funds to renovate the properties.
There are other conditions that make the investment of illegal funds in the attractive Australian property sector, including lack of AML / CTF DNFPBs regulations that facilitate real estate transactions, reducing the risk that the customer's identity or source of funds for questioning, and eliminates the risk that the transaction will be reported to AUSTRAC.
Recently there has been much attention in buying real estate in Australia by foreign buyers who try to hide their identity. The House of Representatives Standing Committee on Economics considered this issue in 2014 and recommended that the government is considering the purchase of a residential property by foreign investors as a possible area of research for this review.
Addressing the risk of ML / FT posed by DNFPBs
DNFBPs not regulated under / CTF Act ALD generates a large gap in the AML / CFT regime in Australia that provides opportunities for criminals to abuse the DNFPBs services to launder illicit funds. ..
The extent of AML / CFT regulation to the remaining DNFBPs deliver a number of important benefits:
- A current "blind spot" regulator would be eliminated and a wider range of information collected and reported to AUSTRAC, and shared with police
- Suspicions about transactions would be communicated earlier in the chain of transactions taking place today, providing opportunities for the application of principles to disrupt criminal activities and
- More detailed information about the recipient of the funds and assets are collected when the complex legal structures were first established.
Recommendation 4.6
AUSTRAC Department and the Attorney General, in consultation with industry, should:
a) Develop options for the regulation of lawyers, conveyancers, accountants, dealers in high-value, real estate agents and providers of trust and company service under the AML / CFT Act, and
b) Conduct a cost-benefit analysis of regulatory options to regulate lawyers, accountants, valuable brokers, real estate agents and trusted vendors and business services under the AML / CTF Act.
Post a Comment