Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to table an explanatory memorandum relating to the bill.

Leave granted.

I table an explanatory memorandum and seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

Th e speech read as follows—

Despite years of promises, consultations and reports, this government, and successive governments before them, have failed to take the necessary action to protect Australia's financial system from misuse by criminals, kleptocrats and terrorists.

In particular, the failure to include lawyers, accountants and real estate agents within the scope of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act), and the failure to establish a register of ultimate beneficial ownership, has seen Australia become a global hotspot for the movement of illicit funds, and for money laundering through real estate in particular.

Each and every year, billions of dollars in dark money washes in and out of the country, pushing up house prices and depriving governments—here and abroad—of tax dollars, while allowing criminals to evade authorities and protect their wealth.

This Bill would simply force the government to act on their promises and improve Australia's compliance with international standards.

It would require the government to introduce legislation into the parliament by 30 September 2022 to:

Both of these measures form part of the International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation as outlined in the recommendations of the Financial Action Task Force (FATF).

The designation of services provided by lawyers, accountants and real estate agents—the gatekeepers—under the AML/CTF Act was forecast in the Explanatory Memorandum of the 2006 Bill. Fifteen years on, 'Tranche 2' still hasn't happened. Given recent moves by the United States and China on this issue, Australia is now ignominiously grouped with Haiti and Madagascar as the only three countries in the world not to have acted to, or be acting to, require the gatekeepers to establish who their client is and to report any suspicious matters to the relevant authorities.

The 15-year failure to act on Tranche 2 means that ordinary Australians who want to buy a home find themselves bidding at auction against terrorists and international crime syndicates. AUSTRAC recently confirmed this situation, highlighting one of the potential consequences of criminal activity on the financial system and community was "widespread or concentrated real estate purchases with the proceeds of crime, driving property prices up and pricing legitimate buyers out of the market."[1]

Australia is also slipping behind the rest of the world in failing to establish a register of the ultimate beneficial ownership of companies, foundations and trusts. This is despite member nations of the G20 having agreed to lead by example and implement the recommendations of the FATF in relation to beneficial ownership at the 2014 Summit in Brisbane; and despite the government having released a consultation paper in 2016 regarding this implementation.

The Greens acknowledge that there are technical considerations with both measures that require considered drafting. Consequently, this private senator's bill does not seek to prescribe the details of this expansion in the scope of the Act. Instead, this Bill simply sets the parameters and timeframe for the government to bring forward legislation, and allows for relevant departments and agencies to undertake detailed drafting, an opportunity that is not available to senators who are not ministers.

Nonetheless, there has been widespread implementation internationally, and laborious analysis and consultation locally on both measures. Their application with countries with similar legislative structures to Australia is also well understood, as is their benefit in increasing the deterrence and detection of illicit activities, including tax evasion, money laundering, bribery, corruption and terrorism financing.

[1] AUSTRAC, Australia's Major Banks: Money Laundering and Terrorism Financing Risk Assessment, 2021.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.