The government in Australia is thinking of implementing stricter anti-money laundering rules, ones that will include dealers of precious stones and real estate agents. The move was brought on by warnings provided by a global watchdog that involves potential illicit money making its way into the nation.
Authorities in Australia are mostly likely to keep a watchful eye over the surge of money from Chinese buyers who are seeking for a low-risk way to stash money away from their home country. The proposed regulations will not be implemented against Chinese buyers alone but speculations assume that China will be number on the list of countries to watch out for.
Real estate assets have been the choice of Chinese buyers for years. In the past few months, more and more buyers from the Asian country have also been buying away Australia’s rare pink diamonds.
Financial Action Task Force (FATF), an organization with its headquarters in Paris, investigates the ability of countries around the world to battle illicit cash flows. FATF informed Reuters that Australian authorities are lax when it comes to scrutinizing the property and precious stones industries, leading to an “increasing high risk” in the international fight against money launderers. Money laundering has been known to fund the activities of terrorists.
The country’s Attorney General’s Department, which is in charge of Australia’s law and justice framework, is studying the current rules to tighten security and address the concerns of FATF. The rules already in place involve banking, gaming and remittance.
Under current regulations, foreigners are allowed to purchase precious stones and prime real estate lots without showing property identification. Furthermore, the foreign buyers are not required to disclose the source of their financial means.
According to Simon Henry, the co-CEO of juwai.com, which is the biggest website linking Chinese buyers to real estate properties in Australia, the country is facing a higher risk of being involved in money laundering activities through property purchases. Among property buyers from Chinese, approximately 70 % fund the purchases via cash payments, and less than 10 % of these buyers use banks to fund their purchases.
Experts who keep a close eye on international money laundering activities claim that these buyers carry suitcases filled with cash from China. Several wealthy buyers have been caught using fake invoices and underground banking to access funds.