Monday, October 26, 2020

FATF suspends evaluation of Australia’s financial crime laws

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The Financial Action Taskforce (FATF) has suspended the evaluation of financial crime laws mid-way through an examination of Australia’s progress in the area.

A FATF spokesman said, “In October, the FATF decided to temporarily pause the start of all scheduled follow-up assessments – this is not an Australia specific decision.”

But was there more to this? The suspension of the program appeared to spare Australia a further black mark over its lax anti-money laundering laws. Just at a time when the FATF is seeking to force other nations to toughen compliance!

Way back in 2006, the Australian Government agreed to expand anti-money laundering rules for gatekeepers, including real estate agents, accountants and lawyers (known as Tranche II) to prevent illegal funds from flowing into property.

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The reform has been continuously postponed.  Perhaps because of lobbying by industries impacted by these laws? The situation has led to Australia having some of the weakest AML rules in the world.  It has become a haven for parking illegal funds.

The FATF’s 2018 report found Australia was non-compliant or only partially compliant with 14 of its 40 recommendations. In its 2015 report, it was noted “large amounts [of money] are suspected to be laundered out of China into the Australian real estate market”.

Australia had fallen behind in its international obligations to protect the country from financial crimes. Perhaps Australia should have followed New Zealand’s lead when, following the Panama Papers, it introduced its “Phase 2” AML/CFT laws back in 2018.

“The rest of the world is scratching its head over Australia’s policy inaction. We’ve gone from a leader to laggard in the space of a decade,” said Nathan Lynch, a financial crime intelligence expert at Thomson Reuters, “The local financial intelligence community is at a loss. It’s really staggering.”

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Source: Arctic-intelligence

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