Follow the money

• advantage
• 8 years ago
• Categories: capitalism, Economy, tax

What do auctioneers, bullion dealers, precious metal and stone dealers, motor vehicle and boat dealers, antique and art dealers, second hand dealers and pawnbrokers all have in common? They exchange things for lots and lots of cash, and they aren’t banks.

This makes them particularly attractive to drug importers and other organised crime syndicates, tax evaders, and others for whom we need to Follow The Money.

So before Christmas, we are likely to see introduced into the House, Phase 2 of the Anti-Money Laundering and Countering Financing of Terrorism Act (Act).

Phase 1 of the Act came into effect in 2013 and requires organisations such as banks and casinos to conduct customer due diligence. A number of people may through their own personal experiences with their bank, be familiar with the requirements which are to:

•  Obtain and verify the identity of customers
• In some circumstances, verify sources of funds
• Conduct ongoing customer due diligence and monitor account activity
• Identify and report any suspicious activity

Phase 2 involves extending the Act to cover other professions such as lawyers, accountants and real estate agents. We love them all.

The Government aims to introduce a Bill to Parliament before Christmas, with the adventurous aim of getting it into law by July 2017.

The impact of the coming changes means that lawyers, accountants, and real estate agents will be required by law to:

• conduct a higher level of due diligence on clients including obtaining identification in a wider range of circumstances than we do currently
• verify the source of client funds
• report any transactions that may be suspicious to the Police
• In addition, lawyers will be subject to the supervision, monitoring and enforcement provisions of the Act. Who will regulate the legal profession is yet to be announced.

Personally, I’d like to see a whole section of the act about regulating trusts who shift big chunks of capital around from one property to the next. Maybe to capture more in the Proceeds of Crime Act.

Would be good to hear from lawyers who are in the tax structuring field on this, and on whether it integrates with the Australian legal framework.

Follow The Money.