Real estate agents, lawyers in spotlight for money laundering crackdown
By Paul Sakkal
Real estate agents, lawyers and accountants used to launder the money of drug dealers and terrorist-funders will be the target of new laws to stop the flow of dirty money in Australia.
Attorney-General Mark Dreyfus has announced strict reporting obligations for about 100,000 new entities. The move, which will include $165 million in new funding, has been resisted for years by real estate associations and other professional services lobby groups, who argue it would be costly and risk client confidentiality.
Attorney-General Mark Dreyfus during question time last month.Credit: The Sydney Morning Herald
Only casinos, bullion dealers and some solicitors are now required to report suspicious transactions of more than $10,000, making Australia one of only five countries whose rules do not extend to lower-level risks such as real estate agents.
“Let me be very clear: opposing these reforms means aiding and abetting the criminal abuse of our financial system by drug traffickers, people smugglers, terrorists and those who exploit and abuse children,” Dreyfus will say in a National Press Club speech, according to speaking notes.
“These criminals are constantly looking for new ways to exploit our systems and launder the proceeds of their crime through Australian real estate and our economy more generally.
“Opposing these reforms enables criminals to continue to engage in drug trafficking, terrorism and child exploitation and to profit from those serious crimes. No legitimate business wants to assist the laundering of money from these crimes.”
Taking on property agents and lawyers over this issue has proved difficult before. The former Coalition government took no action after a 2016 report urging tougher laws and warning of Chinese nationals using the proceeds of crime to buy Australian property.
Last year, this masthead reported on an alleged Chinese-Australian money laundering organisation that moved an estimated $10 billion offshore while amassing a blue-chip Sydney mansion property portfolio.
In the legal sector, a Gold Coast law firm was found by Queensland’s corruption commission to have been involved in money laundering, fraud and cocaine trading.
Professional groups have consistently warned about a potential rise in operating costs in order to comply with any new checks.
Real Estate Institute Australia president Leanne Pilkington said a range of questions were unanswered.
“There are no concrete plans to undertake a cost-benefit analysis on the inclusion of real estate agents – 99 per cent of whom are small businesses and do not have professional compliance teams,” she said, adding that “caution must be applied so we are not simply introducing compliance for compliance’s sake”.
Transparency International Australia’s then-boss Serena Lillywhite said in 2021 that Australia had become a leading destination for illicit funds.
Giving evidence to a Senate inquiry, she gave 10 examples of property market money-laundering including by Sudanese generals, Chinese high-rollers and Malaysian bankers.
Capital city property markets are a target for criminals.Credit: Paul Rovere
“Money laundering is not a faceless crime. It has devastating impacts, both in Australia and overseas,” she said. “It can reasonably be argued that it is driving up property prices in Australia and locking many Australians out of owning their own home.”
Britain has also urged Australia to beef up its laws because international criminals exploited the weakest links in global regimes.
Law Council of Australia’s Juliana Warner cautioned about any moves that could expose the identity of clients.
“Legal professional privilege is an important privilege of the client. Everyone is entitled to have confidential and privileged communications with their legal advisers,” she said in a statement.
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