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Crims pressure banks

MONEY laundering is a growing problem in Australia and, indeed, worldwide.

New technology and new methods have allowed criminals to find new ways to legitimise cash raised through illicit means.

The Financial Action Task Force’s latest report on money laundering has flagged the Internet and online gambling as major ways of laundering cash.

In 1996, the FATF estimated money laundering was worth between US$590 billion – roughly equivalent to Spain’s economic output – and US$1.5 trillion.

A report by John Walker Consulting Services for the Australian Transaction Reports and Analysis Centre in 1995 estimated money laundering in Australia to be worth between $1 billion and $4.5 billion.

Orna Security Asia Pacific operative John Westall said money laundering was a huge business that was becoming more sophisticated.

“There are unscrupulous, and in some cases unwitting, lawyers, accountants and security dealers out there who help criminals set up intricate money-laundering schemes,” Mr Westall said.

The FATF has flagged professionals acting for criminals as a concern, although its report admits in many cases these people are acting unwittingly.

Their utility varies from setting up corporate vehicles or other complex legal arrangements, to buying or selling property to gaining introductions to financial institutions.

Mr Westall said the whole onus of money laundering was on the banks.

However, Australian Bankers Association director Ian Woods said Australia probably had the most stringent anti-money laundering regime in the world.

Banks are required to report any transactions worth more than $10,000 to AUSTRAC.

They are also required to report any “suspicious” transactions.

Mr Woods said suspicious transactions were usually flagged when the transaction pattern of a person’s account changed dramatically.

“We can also pick up people that are trying to slip under the $10,000 reporting requirements too,” he said.

Information received by AUSTRAC is made available to many government agencies such as the Australian Tax Office and various law enforcement agencies.

Mr Woods said one problem facing bankers was the relative ease with which people could obtain false identification documents.

“In the old days you needed a fairly sophisticated printing set up. These days a $3,500 investment in computer and desk-top publishing equipment can result in passable documents,” he said.

“The ABA has been pushing for a National Electronic Gateway for validation purposes.”

That would allow a bank to check the person’s details on, for example, a birth certificate back to the registry office where it was lodged.

KPMG forensic accounting division head Michael Cashman said Australia had adopted all of the counter-laundering measures suggested by the FAFT.

“Despite this, the scope for money laundering is always there. There are many ways you can do it,” he said.

“It’s like the tax laws. Someone finds a loophole and exploits it. The authorities get onto it and the loophole is closed. Then the launderers look for another loophole.”

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