AML’s ‘free riders’ get new scrutiny


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AML/CFT: New focus on real estate, lawyers, accountants

Philippino casinos, mammoth all-cash transactions for luxury real estate in major cities like New York or London, lax cash-importation rules in Canada–these are just a few examples of the ‘free riders’ in the fight against AML and terrorist financing. But various countries have announced recently new commitments to shut down some of the gaping loopholes in their AML/CFT regulations. Australia last week added itself to the fray.

Reuters reports that Australian authorities have proposed simplifying their AML/CFT regulations in order to cut down on red tape and enhance cooperation and clarity. And they are joining Britain, the U.S. and other nations in moving to crack down on the intermediaries who facilitate money laundering and the lines of business that have previously been excluded from reporting requirements–but that have become favored avenues for shady dealings.

According to Reuters, the proposed statutes would extend “the current anti-money laundering rules to encompass accountants, lawyers, real estate agents and dealers in high-value objects such as jewelry.” The Financial Action Task Force last year credited the nation with a strong overall framework for AML/CTF but also  identified Australia as having insufficient requirements in these areas.

According to the FATF report, Australian authorities and professionals in the banking industry recognize and work to prevent primary threats from drug trafficking, fraud, and tax evasion. However, “most designated non-financial business and profession sectors are not subject to AML/CTF requirements, and did not demonstrate an adequate understanding of their ML/TF risks or have measures to mitigate them effectively. This includes real estate agents and lawyers, both of which have been identified to be of high money laundering risk in Australia’s National Threat Assessment.”

Paul Jevtovic, the head of Australia’s AUSTRAC financial intelligence agency, gave a strong endorsement to the proposed changes and said they are well suited to the nation’s commitment to successful AML/CTF enforcement: ““Better reporting practices from industry means we produce better intelligence, which then helps national security, law enforcement agencies and our partners in Government to investigate and crack down on people doing the wrong thing.”