Kimberley Kitching (Victoria, Australian Labor Party, Deputy Manager of Opposition Business in the Senate) Share this | Hansard source

I rise to speak on the Crimes Legislation Amendment (Economic Disruption) Bill 2020. I will say from the outset that Labor supports these reforms. Labor has consistently argued that Australia's anti-money-laundering and counterterrorism financing framework must continue to evolve to counter attempts by actors to thwart it. Now, more than ever, the risk of money laundering and terrorism financing remains significant as criminals and terrorists seek to stay one step in front of the law. It's a race we cannot afford to lose. Money laundering and terrorism financing are issues not just here in Australia; they are global problems facing many countries. They threaten to undermine Australia's national security and destroy the integrity of our financial system if left unchecked. So Labor welcomes efforts by the Morrison government to improve our anti-money-laundering and counterterrorism financing framework. Australia cannot afford to be a weak link in the global financial chain, nor can it be a soft touch for organised criminals around the world seeking to launder the proceeds of their crime.

It is unfortunate, however, that Australia still lags significantly behind our international counterparts in this field. It's appropriate that a government led by Scott Morrison, a former advertising man, has made Australia such an attractive destination for a very niche audience. As a nation our laws have lagged behind, so we have become a target for nefarious actors wishing to exploit our soft defences.

The Morrison government has repeatedly missed deadlines in its own anti-money-laundering and counterterrorism financing reform timetable. This latest legislation comes more than four years after the then Minister for Justice tabled the Report on the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Associated Rules and Regulations which first called for these changes in March 2016. Nearly five years later, this legislation fails to implement many of these 2016 recommendations. While other countries have strengthened their defences against the proceeds of criminal and corrupt business practices, the Morrison government has left the door open for illicit capital to flood into Australia.

The world's anti-money-laundering and counterterrorism financing watchdog, the Financial Action Task Force, has expressed serious concerns about Australia's regulatory framework in regard to these issues and this government's failure to implement reforms according to its own timetable. These concerns are why the FATF placed Australia on an enhanced follow-up remediation program in 2015 following a major evaluation of Australia's anti-money-laundering and counterterrorism financing framework which found major noncompliance with international best practice in several areas. The FATF's 2015 mutual evaluation report made clear that Australia is 'an attractive destination for foreign proceeds of crime, particularly corruption related proceeds flowing into real estate'. Serious and sustained breaches of FATF standards and obligations can result in jurisdictions being greylisted or blacklisted, increasing the cost of doing international business and restricting access to international finance.

There are growing risks to Australia from the failure of this government to fully implement either the FATF or the statutory review's recommendations. Other jurisdictions have been able to race ahead of Australia with much stronger protections. This year, Australian banks reportedly unknowingly washed over $500 million for violent South American cocaine cartels with the proceeds of crime moving through multiple countries before they were finally disrupted by Australian law enforcement. This is clear proof that while Prime Minister Scott Morrison has underperformed in his position, his failure to implement basic anti-money-laundering and counterterrorism financing measures has made Australia an attractive destination for criminals and terrorists to launder money. We can't afford to be a soft touch for these criminals. Australia needs to ensure its anti-money-laundering and counterterrorism financing laws are compliant with international best practice. It is unacceptable that Australia remains behind its international counterparts in this crucial area, but the government has been slow to even make a start on bringing on Australia's anti-money-laundering and counterterrorism financing laws and making them up to scratch. The FATF's 2015 report noted that Australia lacked focus on 'addressing risk from abuse of complex corporate structures' and that authorities were challenged to present convincing evidence about what outcomes their efforts were achieving. This, as well as the government's failure to properly enforce existing laws, meant that no action was taken against Westpac until it had breached AML/CTF laws 23 million times. This is obviously unacceptable.

Indeed, an ongoing New South Wales Independent Liquor & Gaming Authority inquiry into Crown casino has revealed shocking noncompliance with money-laundering laws by Australian casinos and junket operators, even going as far as being accused of turning a blind eye or being recklessly indifferent to money laundering. But AUSTRAC, the government's own regulator, gave these risky casino junket operations its tick of approval only three years ago. Since then, tens of billions of dollars have poured into Australia through these channels. Labor had to fight to get AUSTRAC to release its full 2017 report into casino junkets. Initially, AUSTRAC would only release a heavily redacted report. It was when Labor senators moved an order for the production of documents, which forced the government to release the document, that we found out that AUSTRAC had warned the government, back in 2017, that there were major gaps in the regulation of junkets in 2017. AUSTRAC went on to say that compliance by casinos appeared to be generally more with the letter than the spirit of the law. Casinos use these technicalities to absolve themselves of conducting robust due diligence in relation to the source of the funds presented to them.' AUSTRAC was concerned that casinos appeared to underestimate money-laundering risks involved in the provision of junket services. While there was a theoretical acceptance that junkets may be exploited, it was AUSTRAC's view that this possibility was not taken seriously. These are all quotes from that report.

So we asked: did the government proactively release this information in 2017? No, it did not. We asked: did the government work to close these regulatory gaps in 2017? No, they did not. And what was the result? It was through the work of Nick McKenzie from Nine News and later the New South Wales casino inquiry that it became obvious that there was widespread money laundering and terrorism financing. That's how it was exposed. This was happening under the noses of this government. The government had this information in 2021 and yet did nothing. It's worrying that we've needed a New South Wales casino inquiry to bring systemic breaches of money-laundering laws to light, given the profound responsibility of the government to protect all Australians from money launderers and the funders of terrorism.

We need to get Australia's anti-money-laundering and counterterrorism financing laws right. It's too important to get it wrong. Labor will not oppose this much delayed legislation, but we do call on the Morrison government to take anti-money-laundering and counterterrorism financing laws seriously. If nobody follows up on this, we are going to be left susceptible in the battle that we must engage in against money launderers and terrorism financing.