Australia is continuing to fall behind global standards on anti-money laundering and counter terrorism financing measures, with cash, banks, luxury goods, real estate and casinos providing continued channels for money laundering.

In a speech to the National Press Club, Attorney-General Mark Dreyfus said Australia is at risk of being “grey-listed” by the international Financial Action Task Force for failing to meet global standards.

AUSTRAC’s second NRA released today, Terrorism Financing in Australia: National Risk Assessment, found that retail banking, remittance and exchanging cash remain the preferred avenues to move funds.

The risk assessments are designed to help businesses understand the methods that criminals use to launder proceeds of crime or fund extremist violence.

AUSTRAC says most of these illicit funds go to overseas terrorist organisations and affiliated groups.

Social media and crowdfunding platforms have also become integral to fundraising terrorist activities.

“Crimes like money laundering and terrorism financing erode trust in Australia’s financial system and the security of the Australian population. Criminals might be persistent, but so are we,” AUSTRAC chief executive Brendan Thomas said.

“That’s why AUSTRAC has worked with the national intelligence community, law enforcement and regulatory agencies, together with industry and international financial intelligence units to build these risk assessments.

He said the NRAs will help strengthen Australia’s anti-money laundering and counter terrorism financing (AML/CTF) regime, which is a key component of the national, cooperative approach to countering serious and organised crime.

Currently, Australia is one of only five countries – including China, Haiti, Madagascar and the United States – that don’t regulate high risk professions like lawyers, accountants, real-estate agents and gemstone dealers as part of our AML/CTF regime.

Australian Criminal Intelligence Commission data shows the value of the domestic Australian drug market is worth at least $12.4 billion a year.

The exploitation of digital currencies is also allowing criminals to move funds quickly, cheaply and with what they perceive as a degree of anonymity.

The federal government has proposed reforms to simplify Australia’s AML/CTF framework and extend it to higher risk services, including professional services provided by lawyers, accountants and real estate agents.

Transparency International Australia (TIA) has welcomed the government’s reforms.

“Financial crime impacts all of us,” said Clancy Moore, CEO of TIA.

“When kleptocrats, criminals and corrupt officials hide their ill-gotten gains in Australia, it robs local communities of money for essential services and distorts our economy.

“Too often, lawyers, accountants, and real-estate agents choose to look the other way, actively support, or unknowingly enable criminals to launder their proceeds of crime in Australia.

“It’s time to close this massive loophole in Australia’s financial system.”

My colleague Daniel Ziffer wrote detailed feature covering the issue: https://www.abc.net.au/news/2024-05-06/new-laws-to-stem-money-laundering-through-real-estate/103800070

You can also listen to David Lipson from ABC AM program interview this morning with Brendan Thomas: