An interesting article published last weekend in the Australian Financial Review highlights a significant yet known issue within Australia's luxury property market. Federal police recently dismantled an alleged Chinese-Australian money laundering operation that funneled approximately $10 billion offshore while amassing a substantial property portfolio, including Sydney mansions and large tracts of land near the city’s second airport. Transparency International Australia’s CEO, Clancy Moore, warns that billions of dollars worth of Australian assets are still being acquired with illicit funds due to insufficient checks on cash flowing into shell companies.
Australia’s anti-money laundering laws are notably weak, particularly regarding real estate agents, accountants and lawyers. This makes Australia an attractive destination for dirty money, facilitated by opaque corporate structures often set up by legal and financial professionals. Moore argues for tougher reporting obligations and the creation of a public beneficial ownership register to enhance transparency.
Despite a report in 2016 recommending greater disclosure, it wasn’t until May that the Labor government allocated funds to expanding reporting obligations. However, some industry groups argue that these measures will create unnecessary burdens without significantly improving transparency. The government, however, remains committed to implementing a beneficial ownership register, with consultations on the scheme expected to begin this year.
Click here to read the full story: Australian Financial Review
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