INTHEBLACK June/July 2024 - Magazine - Page 20
“Significant regulatory gaps and vulnerabilities
have made Australia an increasingly attractive
destination for laundering illicit funds.
Left unaddressed, Australia’s financial system
would remain vulnerable to criminal exploitation
through the use of professional services, weakening
the overall integrity of Australia’s AML/CTF regime.”
MARK DREYFUS, ATTORNEY-GENERAL OF AUSTRALIA
matter reports from external parties
relating to transactions potentially linked
to crime.
TRANCHE TWO REFORMS IN AUSTRALIA
In April 2023, Australian Attorney-General
Mark Dreyfus released the first of two
consultation papers on proposed reforms
to Australia’s AML/CTF regime to capture
additional tranche two “high risk entities”.
These include “gatekeeper” professions
that manage financial transactions, such
as accountants, lawyers, trust and company
service providers, real estate agents, and
dealers in precious metals and stones.
Dreyfus says the reforms will bring
Australia into line with the standards
recommended by the Financial Action Task
Force (FATF), which leads global action
to tackle money laundering, terrorist and
proliferation financing on behalf of over
40 member countries.
Currently, Australia is one of only five
jurisdictions that do not regulate tranche
two entities under an AML regime –
the others are Mainland China, Haiti,
Madagascar and the US.
“Significant regulatory gaps and
vulnerabilities have made Australia
an increasingly attractive destination for
laundering illicit funds,” Dreyfus says.
“Left unaddressed, Australia’s financial
system would remain vulnerable to criminal
exploitation through the use of professional
services, weakening the overall integrity
of Australia’s AML/CTF regime.
“Since 2015, Australia has failed to
comply with 16 out of 40 FATF Standards,
20 INTHEBLACK June/July 2024
including extending the AML/CTF regime
to tranche two entities. As a result, Australia
now risks being ‘grey-listed’ by the FATF,
which could result in significant harm to
our economy.”
Dreyfus says accountants, lawyers and
other tranche two entities are particularly
vulnerable to exploitation by transnational,
serious and organised crime groups and
terrorists seeking to disguise ownership.
This includes the ownership or controls
of assets, concealing the origins and
purposes of financial transactions,
facilitating tax evasion and, ultimately,
laundering the proceeds of crime.
“Operating through or behind a professional
adviser can provide a veneer of legitimacy
to criminal activity,” Dreyfus says.
“These practitioners can be used to create
complex structures that create distance
between criminals and their illicit wealth,
and facilitate obscuring property ownership,
providing ideal opportunities for laundering
large volumes of illicit funds.”
SINGAPORE STING TRIGGERS OVERHAUL
In Singapore, the recent discovery of
a multi-billion-dollar money laundering
syndicate that led to multiple arrests was
the major trigger for a series of proposed
legislative reforms announced in October
2023, which are designed to refine the
country’s AML framework.
They include new legislation that will
require all companies and individuals
providing corporate services (CSPs) to
register with Singapore’s Accounting and
Corporate Regulatory Authority. CSPs will
Martin Ollman/Stringer via Getty Images
F E AT U R E
