In its Organised Crime in Australia report, the Australian Crime Commission stated that ‘[c]ontemporary estimates suggest that the level of money laundering in and through Australia is at least $10 billion a year’ (ACC 2011: 3). Minimising opportunities for money laundering represents an important means of reducing the incidence of large-scale organised, financial crime in Australia. As financial institutions work towards full compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act), it is suspected that criminals may look to non-financial services sector businesses and the professional sectors in order to facilitate the laundering of illicit funds and the financing of terrorist activities.
The existing anti-money laundering/counter-terrorism financing (AML/CTF) regulatory framework is, at present, focused on the financial, gaming and bullion services sectors. However, in order to implement Australia’s international obligations set out by the Financial Action Task Force (FATF) on Money Laundering and to make the use of professional services unattractive to those seeking to engage in money laundering and financing of terrorism, the Australian Government would need to extend the regulatory requirements to specified services provided by certain business and professional groups. Such regulatory controls would be in addition to the existing professional regulatory regime applicable to some registered practitioners such as legal practitioners, as well as the ordinary provisions of federal and state or territory criminal laws aimed at controlling money laundering and financial crime.
In order to provide evidence upon which any future reforms to the AML/CTF Act can be developed, the Australian Institute of Criminology (AIC) undertook research into the prevalence and future threat to Australia’s non-financial services sector businesses and professions becoming involved in money laundering or financing of terrorism activities. In 2009, the AIC hosted a series of roundtable discussions at which executives and senior policy officers of business and professional associations from around the country met to discuss the proposed legislation and the nature and extent of risks to the sectors. These meetings revealed the necessity for more comprehensive insight into, and data on, the nature and extent of risks of money laundering and financing of terrorism to these sectors.
The AIC then undertook extensive research in order to determine industry perceptions of the level of risk that exists for legal practitioners, accounting professionals, real estate businesses, dealers in precious metals and precious stones, and trust and company service providers that are the business and professional sectors included within the FATFs recommendations. Different types of participants in each sector were assessed separately because of the considerable variation in roles, regulation and threats. In addition, the AIC undertook a survey of the legal sector to determine attitudes towards the proposed legislative reforms and perceptions of the level of risk of money laundering and financing of terrorism faced by the legal profession.
The research has been limited by having to rely on public source materials only and generally, the publicly available evidence of intentional money laundering and financing of terrorism in the business and professional groups examined was very limited. Accordingly, few examples of illegality that involved these businesses and professions were able to be identified. The absence of publicly available evidence of involvement in ML/TF does not, necessarily, imply that such conduct does not exist; rather, it is an indication that such conduct has not been detected by existing controls, or is not publicly available. Further exploratory research using qualitative research methods and making use of law enforcement and intelligence agency resources, would be needed to provide a thorough assessment of the actual levels of risk.
The present study did, however, make good use of information obtainable from industry participants and industry bodies, case law and international publications. In order to ensure the validity of the findings, the AIC also spent considerable time and effort having them reviewed and workshopped with key agencies and professions affected by, or working in, the AML/CTF sector. The information presented relates to that examined by the AIC and does not necessarily reflect the policy position of the Australian government or other stakeholders.