Real Estate Agents To Help Combat Money Laundering
Real estate agents and other parties involved in property transactions will be required to report suspicious clients under anti-money laundering rules the federal government is planning to extend to the property industry, said the Real Estate Institute of Australia (REIA).
Jock Kreitals, CEO of REIA, said the lobby group was trying to ensure that the rules would be implemented in a way that would minimise regulatory burdens. “Our task is to work out something that is not truly onerous,” Kreitals told the Australian Financial Review. “We are aware of the recommendations and aware that in time they will be imposed on Australia. We are working with the government on something sensible.”
Australia has yet to comply with its international commitments to apply strict anti-money laundering rules to lawyers, real estate agents, accountants, and tax planners involved in the property industry, according to Transparency International (TI), a Berlin-based non-government organisation.
If implemented, property lawyers and real estate agents would have to instruct their clients to reveal who was really buying the properties purchased via shell companies.
In a recent report, entitled Doors Wide Open: Corruption and Real Estate in Four Key Markets, TI said the governments of Australia, Canada, the United States, and the United Kingdom needed to close glaring loopholes to prevent corrupt elites from “laundering the proceeds of grand corruption in their local real estate markets.” Not surprisingly, Chinese investors have been identified as major players in these scams.
“There is clear evidence that such investment in Australian property is also an easy and convenient way to hide hundreds of millions of dollars from criminal investigators, tax authorities or others tracking criminal behaviour and the proceeds of crime,” the report said. “In Australia, 70 per cent of Chinese buyers pay in cash and they represent the largest proportion of foreign purchases in the country.”
The Australian government promised during an anti-corruption summit in London last year that it would tighten its anti-money laundering rules. However, Transparency International thinks the government has been slow to deliver on its promises.
AUSTRAC, the money laundering watchdog, investigated more than $3bn in suspicious transfers by Chinese investors in 2016, including about $1bn in property transactions.
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