Background
In 2015 the Australian Government Australian Transaction Records and Analysis Centre (AUSTRAC) released an article titled Money laundering through real estate 2015. AUSTRAC found that Criminals may be drawn to real estate as a channel to launder illicit funds.
Current Status
Recently, on the 9 September 2024 the Australia Government, Australian Institute of Criminology (AIC) published an article on the Money laundering and the harm from organised crime, consultancy report – a link to this article is provided below.
The AIC consultancy report indicated that the real estate industry continues to be an avenue for Criminals to launder large amounts of money. The AIC noted, “The vulnerability of the real estate market to money laundering has been well established in Australia and overseas,”
Next steps
On the 11 September 2024 the Commonwealth Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill 2024 into Parliament, whilst the legislation is still before Parliament, we should consider the practical implications if the legislation passes – a link to this bill is provided below.
If the Bill passes, AML/CTF obligations would not apply until 1 July 2026. The amendments would include real estate agents being among the designated services that are obligated to report suspicious financial transactions. It’s anticipated that real estate agents will be required to enhance their due diligence processes to identify suspicious financial transactions.
Penalties for non-compliance
Real estate agents will have to be aware of the Civil court-ordered fines for non-compliance with AUSTRAC requirements. AUSTRAC can apply for a civil penalty order from the Federal Court. The Court may then order you to pay a penalty to the Commonwealth.
Recent case
On 7 December 2022, AUSTRAC applied for civil penalty orders against SkyCity Adelaide Pty Ltd (SkyCity) that operates the SkyCity Casino for alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
On 7 June 2024 the Federal Court of Australia ordered SkyCity to pay the $67 million penalty for its breaches of the Act.
At Baybridge we are well versed in Commonwealth Prosecutions to assist our Real Estate clients navigate these proposed legislative amendments.
Contact our team now.
Money laundering and the harm from organised crime: Results from a data linkage study | Australian Institute of Criminology (aic.gov.au)
Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 – Parliament of Australia (aph.gov.au)
