Further action recommended to combat money laundering in professional sectors

Thursday 23 April 2015

Article by Kirsty Timsans

As a result of Australia’s booming property market, the Financial Action Task Force (FATF) has warned Australia is seen as an “attractive destination” for foreign proceeds, particularly corruption-related proceeds flowing into real estate, from the Asia-Pacific region.

Further action recommended to combat money laundering in professional sectors

According to FATF, Australian authorities needed to improve their oversight of the non-for-profit (NFP) and professional sectors, in addition to legal persons such as those foreign companies operating within Australian borders.

“Australia has made sound progress in implementing the FATF international standards for combating money laundering and terrorism financing since its last evaluation in 2005. While the FATF recognises the positive improvements made by the Australian government, we seek to encourage further actions in a number of areas highlighted in this report", said FATF Vice President, Je-Yoon Shin.

In the report published yesterday, a key concern was that "Australia has not undertaken a risk review of the NFP sector to identify the features and types of organisations that are particularly at risk of being misused for TF.”

FATF also said major reporting entities including Australia’s big domestic banks, whilst having a good understanding of their money laundering risks and obligations, did not always comply with FATF standards.

The report also found that there were deficiencies in the preventative measures implemented by those organisations working in the remittance market, therefore increasing their risk of being misused for money laundering or terrorism financing purposes.

Professional groups such as real estate agents and lawyers did not demonstrate an adequate understanding of their risks or have any measures put in place to mitigate them effectively, despite being identified by the FATF as high money laundering risks in Australia.

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