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The reforms to enlist real estate agents in the effort to stop money laundering are one step closer to becoming reality.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 introduces significant changes to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime that the government is describing as “long overdue”.
In 2015, the global financial watchdog Financial Action Task Force determined that Australia had failed to comply with a number of international standards. Specifically, Australia has not yet extended its anti-money laundering and counter-terrorism financing regime to so-called “tranche two” entities, including real estate agents, lawyers and accountants.
That will change if the Albanese government can get this bill through Parliament.
The most recent federal budget earmarked $166.4 million to implement these reforms, a portion of which is set to be dedicated to providing education and guidance to newly regulated entities like real estate businesses to understand their obligations.
In announcing the introduction of the bill, the Attorney-General Mark Dreyfus stressed the need to “modernise Australia’s AML/CTF system to ensure it keeps pace with our global financial system – closing the gaps that increasingly sophisticated and professional criminal organisations can exploit”.
“Each year billions of dollars are generated from illegal activities such as drug trafficking, tax evasion, cyber crime, human trafficking and arms trafficking. The proceeds from these crimes are used to fund further serious crimes such as terrorism and child abuse,” he noted.
“The bill will close a significant regulatory gap in Australia by expanding the regime to address vulnerabilities within ‘tranche two’ entities, including lawyers, accountants, real estate professionals and dealers in precious stones and metals,” he said.
He thanked the industry organisations that consulted on the bill, and expressed his confidence in its success.
“The Albanese government is taking up the fight against money laundering and terrorism financing in Australia. The government looks forward to all members of the Australian Parliament joining us in supporting the passage of this bill.”
Earlier in the week, the Real Estate Institute of Australia (REIA) called for a “detailed quantification of the costs and benefits of the proposed second tranche of money laundering”, warning that it could put some real estate businesses under financial pressure.
REIA CEO Leanne Pilkington noted that “real estate agencies are primarily small businesses and do not have the expertise nor resources to be able to identify such activity”, and pressed for the cost-benefit analysis.
“The experience in New Zealand with the introduction of reporting money laundering by real estate agencies has been that the costs ranged from $30,000 for a small agency to up to $60,000 for a large agency, with extra requirements like having a compliance officer and an auditing process. These are additional business costs incurred across the entire industry for an, as yet, unquantified public benefit,” she said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
