The Senate has heard Australia has fast become a 'very attractive' destination for money laundering through real estate due to the lack of government regulations.
It appears everyone, criminals included, want a slice of Australia's property pie.
Australian Transaction Reports and Analysis Centre (AUSTRAC) in a submission to the Senate reported illicit money laundering is driving up house prices across the country.
This submission highlighted criminals are being drawn to Australia's real estate industry as a channel for illicit funds due to the ability to pay for real estate in cash and disguise the ownership of property or investments.
Australia is one of only three countries in the world behind Madagascar and Haiti failing to introduce regulations on identifying how certain types of businesses manage the risks of money laundering and terrorism.
'Tranche two' of regulations was first floated by the Howard Government in 2007, however was pushed back in the wake of the global financial crisis, changes in government and kickback from industries.
Speaking to the Senate on Wednesday, REIA President Adrian Kelly said the suggestion that money laundering is pushing house prices up is not something that he believes can be substantiated.
In their submissions to the inquiry, the Real Estate Institute of Australia and the Law Council both opposed the tranche two reforms, citing costs for small businesses and constraints on legal privilege.
Appearing before the Senate inquiry on Wednesday, Mr Kelly's words seemed at odds with REIA's official stance, saying the association would be willing to look into taking necessary steps to prevent any illegalities that may be occurring.
Speaking to the Senate on Wednesday, Australian Federal Police Deputy Commissioner Ian McCartney said the criminal assets confiscation task force has seized $116 million worth of property of a total of $187 million criminal assets in the last financial year alone.
Further AFP Deputy Commissioner McCartney said he was supportive of expanding tranche two to account for real estate agents, accountants and lawyers, stating there was evidence where individuals in the three ‘gatekeeper’ professions had been involved in money laundering.
With the push for new laws gaining traction, their introduction could oblige real estate agents, lawyers and accountants to register with AUSTRAC, reporting items deemed suspicious under the same anti-money laundering regime as casinos and gold bullion dealers.
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