Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

I couldn't disagree with anything that the previous speaker said, but I want to turn some pretty substantive or serious remarks to what's not in the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019. The reality is that, despite the government's tough talk on crime and terror and its noble objectives in this area, our anti-money-laundering regime and counter-terrorism-financing legislation are embarrassingly weak and we're falling even further behind the rest of the world. The government's in its eighth year. It has had seven years to address these issues and make a real difference, but still it has failed to include critical intermediaries known to be part of the money-laundering enterprise, such as real estate agents, accountants and lawyers, in the regime. These intermediaries are identified as high risk in the government's own risk assessments by the regulators, including in the national threat assessment. So the bottom line is: despite the fine words of government speakers, the bill gets about a two out of 10 in terms of what's actually needed. It doesn't bring us into line with the global standards.

Australia's inadequate regime allows corruption to flourish, and it's no surprise that, in their eighth year, the government are still not taking integrity and corruption seriously in the private sector, given their own shameful record on integrity. There's still no legislation for the National Integrity Commission in this House—still. Sports rorts, dodgy land deals, designer watches, cuts to the Auditor-General's budget—that's what they do in the public sector. So it's no surprise that they won't put this regime over real estate agents and other critical property-sector intermediaries.

I'll make the point that the context is important. This stuff is technical and complicated, but it matters in the real world, because right now there are two million children dying of acute malnutrition in Yemen, kids being trafficked and exploited for financial gain in places like South-East Asia and arms dealers selling weapons to small militias in the Horn of Africa, the profits of which will end up in offshore bank accounts. So what might this have to do with money-laundering and counterterrorism financing bills and debates here in Australia? Well, global conflict, political violence, sophisticated criminal syndicates and the institutions that facilitate and smoke-screen their transactions are the underlying and complex elements creating the need for this legislation. It's all interconnected, and it manifests well beyond our borders. It's not just someone else's problem. The laws that we make here, the barriers that we put in place, impact everyone in the global community, and we have to remember that context when we debate what is, in many ways, dry legislation, and to recognise the human cost, because we all lose when these crimes are left in darkness.

The reality is: this happens in our own backyard. There are some industries and individuals, I would say, who are unwittingly caught up in this process. I'd call out some of the smaller money transfer or money remittance businesses that are so critical for so many people in my electorate for sending money home to loved ones and trying to get around the higher fees that the big banks pay, and some of those have been inadvertently caught up in supporting criminal enterprises. But I also think that we've seen anti-competitive behaviour by the banks, using these anti-money-laundering laws as a way of shutting down competitors who are undercutting, and that's a balance that AUSTRAC and the competition regulator need to have a look at.

But it's true that money laundering and the financing of terrorism are also systematically facilitated and entrenched. Transparency International reports that trillions of dollars in suspected dirty money has been laundered through the global financial system over the last 20 years and more than $200 million flowed directly through Australia's banks. Criminal syndicates and arms dealers are benefiting from untold human suffering.

If all that human cost isn't alarming enough, Transparency International's global corruption rankings place Australia now at 12th position. Since this government was elected, we've slid eight points, from being the fourth least corrupt country in the world to the 12th. We have to ask why. There are many factors which are said to contribute to this fall in the rankings, including the decline in the perception of a robust rule of law, with the attempted prosecution of whistleblowers and journalists and secret trials becoming more common. But key to Australia's falling corruption ranking was also the perception that institutions and political representatives were lacking independence and oversight. The government's behaviour this year has certainly reinforced that concern. The failure to introduce a national integrity commission feeds into these surveys and the perceptions which then drive our further fall down the global rankings.

Political violence and the threat of terrorism also remain enduring and pressing issues for Australia, but we're not alone in this. These are problems that cross borders, due more now to internet based criminal activity, trafficking, military intervention, foreign interference and increasingly sophisticated terrorism networks. These aren't just petty thugs. They're transnational political actors who are also using the loopholes in the system, which the government's legislation still does not address, to profit from human destruction for political reasons. They trade in misery and death, for political reasons.

It's in that context that Australia's commitment to the prevention and criminalisation of money laundering—and stronger laws to stamp out the financing of terrorism—has never been more vital. It's not just a legal necessity; it's an ethical imperative. But our actions will be effective only if we work globally, implementing agreed global standards with other countries. Disgracefully, it's clear that we're becoming the weakest link in the global chain of protection. The international money-laundering and counterterrorism financing framework, FATF, provides the agreed framework for our obligations. It's not sexy stuff. It's not interesting stuff. It's incredibly detailed and dense, but it really matters.

Recent exposes—which the previous speaker, the member for Fisher, spoke about—have uncovered money laundering throughout the Australian banking industry. There was Westpac's $1.3 billion fine for its breaches of money-laundering laws and failure to stop child exploitation, with massive funds filtered by the gambling industry remaining concealed. AUSTRAC's recently announced investigation into Crown casino for its potential noncompliance with the anti-money-laundering laws and involvement in illegal offshore activities should concern everyone. Only recently the Crown Resorts chairwoman fronted the New South Wales Independent Liquor & Gaming Authority's inquiry into Crown casino and conceded that its Melbourne casino facilitated money laundering.

Whilst this bill implements some reforms arising from the 2016 report into Australia's regime—that's four years ago—it only amends a few of the deficiencies identified by the FATF. It still does not address all of the identified problems. The most recent 2018 compliance report notes:

… 14 Recommendations remain non-compliant or partially compliant.

In supporting this bill, as I hope everyone in the House will do, we should be very clear eyed that this bill only addresses a few of those issues and that Australia, once we pass this legislation, will still not comply with those international standards. We become the weak link in the global chain, which means we become a more attractive place for dodgy money to come to. Further changes are urgently needed.

The most important concern for the House, as the second reading amendment touches on, is not what the bill does but what it does not do. The primary concern, the huge outstanding weakness in Australia's regime, is the key non-financial businesses and the professional sectors and intermediaries that remain outside the remit of Australia's anti-money-laundering and counterterrorism financing legislation. Real estate agents, accountants and lawyers are still not covered. Of course the vast majority—and we need to say this—of real estate agents, accountants and lawyers are not dodgy and do the right thing. But it is clear by AUSTRAC's own work and advice to the government—this is not some socialist opposition plot over here because we don't like real estate agents!—that there are people in these industries doing the wrong thing. People in these industries are helping to facilitate money laundering and terrorism financing, and the government is not doing enough to stop it. A good government, in its eighth year, would be out there talking to the industry about how to combat this problem and how to get the regulations right to stop money laundering and terrorism financing in these industries while protecting the good operators in the industry and their good reputation. The bill, again, fails to extend the regime to these sectors, who, inadvertently or deliberately, become gatekeepers for money laundering. The gap was highlighted years ago by the FATF and in a subsequent report by the Australian Strategic Policy Institute. The security analysts keep telling the government, 'This is a weakness; this is a problem,' but they don't do anything.

I spoke before on similar legislation two or three years ago—still, nothing has happened. Other members have raised this issue—nothing has happened. You do have to wonder whether the real estate agents have something over the government, don't you? In 2018 they successfully lobbied the government to be exempt from regulations that would have ensured that they would have to report any suspect transfer of money, including offshore transfers. It doesn't sound that unreasonable, does it—that a real estate agent would have a positive obligation to report suspected dodgy transfers of money to the regulator? But they lobbied the government and the government said to their real estate mates: 'Yeah, no worries. We'll let you off that. Don't worry about that. We won't put that obligation on you.' Seriously, it's their eighth year of government.

I might add, the work was done under the Rudd government. The work was done. The legislation and the stuff was ready. They'd done the consultation. They'd worked with the accounting bodies and the real estate industry. It was put on hold, quite sensibly, in about 2009 because of the GFC. The government lost office and then nothing. They've had the work there for eight years and nothing has happened. It's well established that these professions are being used to filter and funnel money and facilitate criminal enterprises. The cases are extensive.

AUSTRAC estimated that suspicious transactions in the real estate sector amounted to approximately $1 billion from China in the 2016 financial year. There were $3.36 billion worth of suspicious transactions in 2015-16. AUSTRAC's 2015 strategic analysis brief, five years ago, recognised that the use of real estate for money laundering is a well-established method in Australia. It filters down to the community, of course, by inflating property prices in certain suburbs, making it harder for Australians in those suburbs to bid against the dodgy money that's coming in, and the problem's real. One AUSTRAC case study report outlines a terrorism financing syndicate that used fundraising procurement procedures to purchase real estate and deposit the funds into bank accounts under the guise of expenses relating to the administration of a charitable organisation, and the money was then used to fund extremist activity.

So, if it's clear from the government's own advice from their regulators, from the independent security experts that the use of accountants, lawyers and real estate agents in these syndicates is not new, why won't the government act? Who are they trying to protect? If the government's serious and their fine words mean something about addressing money laundering and the financing of terrorist organisations then they have to include the gatekeeper professions in their regime.

They've been looking at this stuff for the past few years in America. Even in President Trump's America, their regulators have been doing trials in certain states and discovered, 'Goodness me: when you put these regulations on for positive reporting you find more dodgy, suspect transactions and money laundering going on.' In other jurisdictions they've taken more steps than us to fill that gap. We should be ashamed of that. When the government came to office we were the fourth least corrupt country in the world on Transparency International's rankings, and we've fallen to eighth. That's a fall of one spot per year. If this government gets another term we'll probably be at 11 or 12, and down we'll go, to 12 or 15; we'll just keep going.

It's not that hard. We say we're a global citizen, we say we want world's-best regulation, we say we're serious about that stuff, we go to the international meetings and we sign up to the codes. But what that means is that the government actually has to do the work, bring the legislation into the House and implement the rules. There's no point saying you'll do it if you don't actually do it. There's no point having the spin and the marketing and saying, 'Oh yeah, we're stopping money laundering' if you don't actually do the hard work of drafting the legislation and delivering. It is another example of spin and marketing but no actual delivery.

The world of money laundering and financing of terrorism is certainly dependent on the darker side of humanity, and those involved are enmeshed in greed, the perpetration of exploitation and sometimes the most horrific cruelty in the form of child sex trafficking. We owe it to those in Australia and across the world who are the most vulnerable to ensure that everything that can be done is actually done. That means shining a light onto places that we would prefer did not exist and ensuring that the web of the law catches not just the small flies but also those very skilled transnational actors who know how to avoid the net—and they will see and they know about the weaknesses in our regime. Eight years, and we still don't cover real estate agents and all the intermediaries in the property sector—eight years. It's not that hard.

If the government allows these gaps to remain, they're harming our national security, as they keep being advised by their own regulators, by the security experts. They're weakening the global protections and doing the wrong thing by countries that are actually implementing the standards, and they risk even greater injustice to the most vulnerable in society, here and across the world. So, the bill's minor steps are welcome. They've been well outlined. I won't go through them. But I do note the concern of stakeholders such as the Australian Financial Markets Association and the Financial Services Council that the government cut short the opportunities for consultation and clarification before this bill was introduced to the parliament. They fear that, as we've seen with so much of the government's legislation—even stuff that the opposition in principle supports, around foreign interference—the actual drafting is sloppy; it's not done effectively. And the independent experts say that there are definitional deficiencies in the bill that can undermine its effectiveness.

So, even though the government is doing far too little far too late, there are concerns that it's actually not being properly done. I urge the government: take this seriously. Bring back some legislation. It was drafted by the previous, Labor, government. Bring back some legislation to bring real estate agents, property sector intermediaries, accountants and lawyers into this regime and show that you're serious about stopping money laundering.

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