The Albanese Government is today taking a critical step to strengthen Australia’s protections against money laundering and counter-terrorism financing, and tackling a key resource stream for organised crime.
Each year billions of dollars are generated from illegal activities such as drug trafficking, tax evasion, cybercrime, human trafficking and arms trafficking. The proceeds from these crimes are used to fund further serious crimes such as terrorism and child abuse.
In 2015, the Financial Action Task Force (FATF), the global financial watchdog, found that Australia had failed to comply with a number of critical standards. In particular, Australia had failed to extend our anti-money laundering and counter-terrorism financing regime to ‘tranche-two’ entities including lawyers, accountants and real estate agents.
Despite these clear warnings that our economy was at risk of being exploited by criminal gangs and terrorists, the former government failed to do anything of substance for nearly a decade, leaving Australia dangerously vulnerable.
The Albanese Government’s Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 introduces significant, long overdue reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.
The Bill will close a significant regulatory gap in Australia by expanding the regime to address vulnerabilities within ‘tranche-two’ entities, including lawyers, accountants, real estate professionals and dealers in precious stones and metals. AUSTRAC’s recent Money Laundering ³Ô¹ÏÍøÕ¾ Risk Assessment noted criminals are increasingly exploiting these sectors to conceal illicit wealth and launder money.
The Bill will also help bring Australia into line with international standards set by the Financial Action Task Force (FATF). Australia is now one of only five jurisdictions out of more than 200 that do not regulate these tranche-two entities or ‘gatekeeper’ professions. 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.
The Government is taking the opportunity to simplify, clarify and streamline the AML/CTF regime. This will reduce the regulatory burden on businesses and make it easier to understand and implement effective measures to combat financial crime. The reforms will allow businesses to take a risk-based approach, allowing industry to prioritise their resources. The reforms will also lead to better quality financial data and make it easier for businesses to protect themselves from misuse by criminals.
The Government thanks the representatives of ‘tranche two’ entities who engaged constructively in consultations on this Bill.
The Bill will modernise Australia’s AML/CTF system to ensure it keeps pace with our global financial system – closing the gaps that increasingly sophisticated and professional criminal organisations can exploit. This includes extending the current regulation of virtual asset service providers, that are exploited by serious and organised crime groups to launder the profits of their crimes and hide the origin of funds.
The Albanese Government is taking up the fight against money laundering and terrorism financing in Australia. The Government looks forward to all members of the Australian Parliament joining us in supporting the passage of this Bill.
