Australia could face significant economic repercussions and deter international investors if it fails to enhance its anti-money laundering (AML) and counter-terrorism financing (CTF) efforts.
Attorney-General Mark Dreyfus has announced a regulatory crackdown to curb the inflow of criminal proceeds into Australia. The proposed changes will expand AML laws beyond financial institutions, gold dealers and casinos to include real estate and professional services industries.
Dreyfus emphasised the urgency of these reforms, without which Australia could land on a global dirty-money watchlist. He plans to introduce the reforms to parliament before the end of the year despite resistance from affected sectors.
Industry representatives have warned against an overly stringent regulatory approach.
Real Estate Institute of Australia Deputy President Hannah Gill criticised the broad application of compliance requirements, highlighting that only A$228 million in property had been seized, a mere 0.00228% of Australia's A$10 trillion residential property market.
Law Council of Australia President-elect Juliana Warner called for a narrower scope to avoid unnecessary burdens on legal practices with minimal risk. The accounting sector also urged that new regulations account for existing oversight by multiple bodies.
In its latest report, the Financial Action Task Force (FATF), the global watchdog to combat money laundering, has assessed countries on their compliance with international money laundering and counter-terrorism financing standards.
Australia received a dismal 0% rating for AML and CTF compliance, as did the United States and China. This came in starkly below the 74% average.
FATF's greylisting of countries with weak measures against money laundering could have severe economic and reputational impacts.
Dreyfus criticised the previous government's inaction, stating it put Australia at risk of greylisting, which could harm the economy and its reputation.
He aims to present the reforms to parliament before year-end ahead of Australia’s official assessment by FATF in late 2025.
Head of AUSTRAC, Brendan Thomas, assured industries that the regulations would be purpose-driven and not duplicative, committing to collaborate with industry bodies to ensure practical and effective implementation.
He said the financial crime watchdog was not interested “in regulation for the sake of regulation”.