Russia’s shock letter to Australia as crime gangs launder up to $50 billion in unregulated ‘gatekeeper professions’

Russia has revealed how Australia has ignored money laundering, as organised crime gangs put $50b through unregulated lawyers, accountants and real estate agents.

The Russian Ambassador claimed there was a “lack of interest” from Australian authorities in discussing money laundering issues between the two countries, in an extraordinary letter sent to a Senate Committee investigating the issue.

Dr Aleksey V. Pavlovsky also claimed there has not been a single anti-money laundering or counter terrorism financing inquiry request coming from Australia for the past three years.

ALP Senator Kim Carr, who is chairing the inquiry, revealed the letter from the Russian Ambassador while saying there was similar correspondence from the Chinese Government, suggesting they have also been waiting for law enforcement to contact them about anti-money laundering issues.

Senator Carr asked the Police Federation of Australia CEO Scott Webber if there was a problem in seeking to have these matters followed up with foreign nations.

Mr Webber said it was a question better asked of the Australian Federal Police.

The inquiry is probing AUSTRAC, the nation’s financial intelligence watchdog, about the efficiency and adequacy of Australia’s anti-money laundering regime.

Dr Aleksey V. Pavlovsky, Ambassador of the Russian Federation to Australia. Picture: Supplied

The inquiry has already heard organised and transnational criminal gangs see Australia as a honey pot and are laundering up to $50 billion a year of their ill-gotten gains through unregulated “gatekeeper professions” such lawyers, accountants and real estate agents.

A Senate Committee Parliamentary inquiry has been told it is because Australia has fallen behind the rest of the world and is considered a “laggard” - one of only three countries along with Haiti and Madagascar - which have not implemented updated anti-money laundering laws.

Anti-money laundering expert Anthony Quinn from Arctic Intelligence told the inquiry organised criminals use many sectors to clean the proceeds of crime. These sectors include some that are unregulated in Australia, but which are regulated in almost every other country in the world.

“The Australian government has repeatedly failed to take the necessary actions to meet the Financial Action Taskforce [FATF] recommendations and disappointingly lacked the political will and resolve to address and to take action against the many deficiencies the FATF has highlighted in reports … going back many many years,” said Mr Quinn.

Anthony Quinn, Founder/Director, Arctic Intelligence, appeared as a witness at the Standing Committee on Legal and Constitutional Affairs public hearing. Picture: NCA NewsWire / Gary Ramage

“Australia is not meeting its international commitments and remains one of five out of 200 FATF member countries that have failed to expand the laws to lawyers, accountants, real estate agents, high value dealers, trust and company service providers,” he said.

Mr Quinn said Canberra’s inaction may even result in Australia being “grey listed” by FATF further damaging our international reputation.

The inquiry is questioning AUSTRAC, the nation’s financial intelligence watchdog, about the efficiency and adequacy of Australia’s anti-money laundering regime.

The most recent 2018 report by the FATF, the global authority on anti-money laundering policies, found Australia had failed to implement nearly one-third of its recommendations and called for urgent action to bring our regime up to speed.

Among those recommendations were for Australia to implement the so-called Tranch Two guidelines, which include reporting conditions for lawyers, accountants, and real estate agents in the scope of anti-money laundering and counter terrorism financing laws.

John Chevis appeared as a witness at the Standing Committee on Legal and Constitutional Affairs public hearing. Picture: NCA NewsWire / Gary Ramage

John Chevis from the Police Federation of Australia also recommended to the inquiry there may need to be a “cultural shift” inside AUSTRAC after its “apparent failure” to detect 23 million transaction breaches at Westpac.

This failure suggested “AUSTRAC is not capable of identifying such breaches,” he said.

Mr Chevis suggested AUSTRAC’s regulatory function be calved off to a dedicated body.