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GRC Professional : GRC Spring 2012
19 member nations against the 10 elements in these standards. Australia ranks among the countries with all 10 elements in place, while at the other end of the scale Andorra, Aruba, Barbados and Malaysia were this year reported as needing the most improvement. It's estimated -- and this is only an educated guess because of its clandestine nature -- that money laundering amounts to as much as $2 trillion a year globally. The rule of thumb is that it's somewhere between two and five per cent of GDP, which means it could be as much as $68 billion a year in Australia. Earlier this year, UK bank Standard Chartered was accused of breaking US anti-money laundering rules targeting countries such a s Iran, while HSBC apologised for "shameful" system failures that allowed the laundering of money for terrorists and drug cartels. Expanded reach Proposals are on the table to expand the reach of Australia's AML/CTF Act to lawyers and accountants. It is still under government consideration, but the change would bring Australia in line with the recommendations of the Financial Action Task Force (FATF), an intergovernmental body that sets international standards for combating money laundering and terrorist financing. Australia is one of its 34 member countries. The FATF has a specific designation covering non-financial businesses and different professions whereas, Australian regulation has a catchall reference to Australian financial service licence holders who arrange for "designated services" to be provided, which can pull people such as financial planners under the umbrella of the law. ••• INTEGRATION Payment by 'Y' of False invoice to Company "X" Offshore bank Transfer on the bank account of Company "X" Wire transfer Loan to Company 'Y' Purchase of luxury assets Financial Investments Commercial/Industrial Investments CASE STUDY Wickenby snares launderer Tax avoidance and money laundering are often bedfellows and so it was in the case of tax scheme promoter Robert Agius. Agius was jailed in August for his leading role in a $5 million tax fraud, with his sentence of eight years and 11 months being the longest term imposed so far on a Project Wickenby target. Project Wickenby is a multi-agency taskforce focusing on the use of "secrecy havens" (see main story) for tax evasion and crime. Since Wickenby's advent in 2006, some 67 people have been charged with serious tax avoidance, money laundering and fraud, and 26 of them convicted. About $2 billion of outstanding tax revenue has been collected and fresh liabilities raised. Agius was found guilty of conspiring to defraud the Commonwealth between 1997 and 2006 in what was dubbed a "round-the-world trading scheme" involving eight companies. Money was sent to New Zealand bank accounts, and false invoices for consulting, loan agreements and insurance certificates issued from Vanuatu and Ireland. The funds were returned to Australia to the personal accounts of company directors and categorised as loans. At one stage Agius entered a sham arrangement to "buy" a share in an expensive motor boat to repatriate funds to Australia. Money laundering is also an element in what is Project Wickenby's biggest tax fraud investigation yet. Investigations are ongoing, but in April a 67-year-old man was arrested and more than $40 million of luxury assets, including prime real estate, cars and yachts were quarantined as suspected proceeds of crime. It's alleged that a benefit of $63 million was gained over three years through the use of a complex unit trust structure and inflated prices for Australian patents that were transferred offshore. It's also alleged these funds were then laundered through an account in the UK and numerous accounts in Hong Kong before being transferred back into Australia.
GRC Winter 2012
GRC Summer 2013