Proposed new laws to toughen anti money laundering, close loopholes

New laws aimed at strengthening laws which have allowed drug traffickers, organised crime groups, people smugglers and terrorists to launder dirty money through real estate, dodgy accounting and luxury goods will be introduced in parliament on Tuesday.

The reform measures, which were first flagged by Attorney-General Mark Dreyfus in July and will be introduced into parliament on Wednesday, will put extra pressure on “gatekeeper professions” like lawyers, accountants, real estate professionals and dealers in precious stones and metals to proactively spot and report crime.

Mr Dreyfus said the overdue laws will tackle a “key resource stream for organised crime,” which had been flagged as lacking by the global watchdog, the Financial Action Task Force (FATF) in 2015.

“Each year billions of dollars are generated from illegal activities such as drug trafficking, tax evasion, cybercrime, human trafficking and arms trafficking,” he said.

“The proceeds from these crimes are used to fund further serious crimes such as terrorism and child abuse.”

As it stands, Australia is just one of five countries, alongside the US, China, Haiti and Madagascar, which have resisted the laws, with Mr Dreyfus stating it could put Australia’s “international reputation” at risk.

“Australia is now one of only five jurisdictions out of more than 200 that do not regulate these tranche-two entities or ‘gatekeeper’ professions,” he said.

“It means Australia is at serious risk of being ‘grey-listed’ by the FATF, which would not only be damaging to our international reputation but could result in significant economic harm to Australians and businesses.”

On Monday, a report from the Australian Institute of Criminology and the Australian Transaction Reports and Analysis Centre found criminal syndicates involved in money laundering were responsibly for 2.5 times the amount of crime-related harms as groups not involved in money laundering.

The study also found an increase in money laundering was also a warning sign of increases in crime-related harm, with the research suggesting this was “due to the reinvestment of illicit funds in future criminal enterprises”.

The involvement of “professional facilitators” were likely to result in higher sums of money being cleaned, with the real estate and gambling sectors processing larger amounts of criminal proceeds compared to other sectors.