Money Laundering in Australia: Analysis of Laws and Regulations

This report provides a comprehensive overview of money laundering in Australia. It begins with an introduction to the concept, emphasizing its impact on economic stability and its classification as organized crime. The report then delves into various defenses against money laundering implemented by the Australian government, highlighting the role of domestic laws, legislations, and initiatives such as the FATF and the Criminal Code Act of 1995. It also analyzes weaknesses in the current system, such as the absence of regulations for real estate agents, accountants, and lawyers, and the lack of specific legislation. The report further discusses anti-money laundering initiatives, including the roles of the Australian Federal Police and AUSTRAC, and outlines penalties for money laundering offenses. The conclusion summarizes the key points, reiterating the severity of money laundering and suggesting ways to improve regulations and enforcement to combat this serious crime and protect the Australian economy. The report uses references from various sources to support its arguments and findings.

Running head: MONEY LAUNDERING IN AUSTRALIA
MONEY LAUNDERING IN AUSTRALIA
Name of the Student
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Author Note

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Introduction
Money laundering has been considered to be one of the organized crimes as it effects the
monetary stability of the economy. It is a crucial risk where the individuals who commit such an
act directly challenges the financial status of an economy and corrupts the people who are
associated with it (Hopton 2016). It is considered to be an organized criminal activity. It is the
method in which the money has been made in huge amounts through some kind of criminal
activity that is illegal and considered to be dirty and the method to make the money look clean is
known as money laundering. It is considered to be unlawful and it causes monetary instability in
the economy. Thus, it needs to be prevented (Masciandaro 2017).
This paper discusses the concept of money laundering and the various merits and
demerits of money laundering. It also discusses the various anti money laundering processes
which are initiated and implemented by the government in order to stop the gruesome act from
spreading. In conclusion, it summarizes the several points which have been discussed in this
paper.
Discussion
Various defenses for money laundering
Money laundering is a process by which the money obtained through illegal activities are
through a process made clean. The criminal offenders try to use their money that has been
acquired illegally to be used effectively. The money can be laundered in three techniques.
Firstly, the money can be put into a legitimate or a legal system through the process of
placement. Secondly, the source of the money that is illegal is concealed or hidden by a layering
of the system by several transactions and other book keeping trickeries. Lastly, the money that

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has been kept in the legitimate account is considered to be taken out which would be used
effectively for other purposes. Therefore it can be understood or comprehended that money
laundering is considered to be a serious offence. It is also considered as a criminal offence which
causes economic harm to a nation or a country which would create a kind of monetary instability
in the country. Therefore, this is an offence which needs to be prevented (Chong and Lopez‐De‐
Silanes 2015).
There was some crime prevention scheme needed in order to tackle the crime of money
laundering, as it had become an international concern for different nations as the illegal activities
were being carried out and the process of clearing the money and using it for legitimate purposes
was increasing and it was directly effecting the financial status and the economy of the nations
therefore, this criminal activity needed to be prevented as it was posing as a risk. Australia has
tried to combat money laundering crime and the efforts to protect the country from money
laundering crimes are guided and regulated byInternational Standards on Combating Money
Laundering and the Financing of Terrorism & Proliferation and the FATF which means that
Financial Action Task Force where the nation is considered to be a founding member. The crime
of money laundering is considered to be a serious offence as it falls under the category of the
organized crime. The crime is considered to be directed to create an impact on the financial
status of an economy as it is an organized crime it involves the money that has been obtained
through criminal activities has been put into a legitimate system in order to use the money legally
and effectively (Liss and Sharman 2015).
The Australian Government implements several defenses against the prevention of
money laundering as it effects the economy of the country directly and it is considered to be a
serious offence. The defense that has been implemented is considered to be the domestic laws

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which are being enforced by the government in order to prevent the crime. The initiatives that
have been taken by the nation are through legislations which try to detect, prosecute and deter
the activities such as money laundering by imposing the activities of money laundering as
criminal offences at the state level along with the common wealth and other territorial levels.
There has been an asset legislation measure which have been implemented at the state level or
the territorial level along with the common wealth level (D'Souza 2017). There have been
various detection and prohibition measures which have been implemented and enforced at the
common wealth level. There has been certain regulations and guidelines which have been
implemented under the Federal Criminal Code Act, 1995 (Cth) (Criminal Code) which tries to
define what the actual act of money laundering is and provides certain regulations and guidelines
for it. There are certain investigatory powers which have been given to Australia which would
tries to prevent such practices.
Various weaknesses in preventing Money Laundering
There are certain lacuna or weaknesses which have been discovered where the Australian
government fails to enforce the laws and regulations which have been implemented. The crime
of money laundering is considered to be a heinous and gruesome act which is also considered as
an organized crime. The initiative to make money laundering a criminal offence came later as it
was amalgamated with narcotics and drug related crimes which was agreed on by several other
countries. It mostly dealt with drug related issues other than crimes related to money laundering.
The first anti money laundering in order to prevent money laundering was considered to be
instituted however, the enforcement was weak. This initiative was a small step in order to control
and prevent the money laundering practices that were taking place. The directive tried to

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implement several techniques like it tried to implement the regulatory laws as well as the
criminal laws for money laundering offences but the regulatory authorities were not too well
equipped to handle such a crime. (Alexander 2016). It also asked all the countries to make the
offence a criminal offence that meant that money laundering would be considered to be a
criminal offence. Even though, these were ratified by some of the countries the implementation
was not strong and thus, offenders got away with it. Another motive or any objective that was
taken by the directive was to pressurize the financial institutions both in terms of morality and in
terms of economy. Though, the directive tried using various measures it was not that effective in
preventing the crime as there were certain lacuna in implementing these regulations which would
help in the prevention of money laundering and it would ensure the safety of the financial
economy of the nations against such a gruesome crime (Levi 2015). It creates a direct impact on
the financial economy of the country as the crime requires the money, which has been obtained
through illegal activities to be used in a legitimate system that would layer the money through
some trickeries, and if the money has been withdrawn from that legitimate system then it can be
used effectively. The weaknesses are that the Australian money laundering regulations do not
cover any kind of real-estate agents or any kind of accountants or lawyers. This creates a great
lacuna in the system since these are the individuals who come in the category of wide variety of
people who would get away with committing the act (Aziani 2018). There are not much
regulations or guidelines which have been provided or enforced by the government for money
laundering specifically which makes it an attractive hub for the criminals to continue with the act
of money laundering which is considered to be a criminal offence. There has also been requests
to make separate legislations which would are not being implemented or drafted because many
feel that it would not be cost effective. Therefore, these are the various weaknesses or lacuna

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which are prevailing in the Australian legal system regarding crimes and offences against money
laundering (Pol 2018).
Anti-Money Laundering Initiatives taken by the government.
The offence of money laundering which is considered to be a serious criminal offence is
also having extra territorial jurisdiction under the criminal code. The Australian Federal Police,
Australian Taxation Office and the Australian Transaction Reports and Analysis Centre which is
also known as AUSTRAC look after the money laundering crimes and there are several other
territorial and other state bodies which are considered to look after the prevention of the money
laundering activities and try to prevent it. The penalties for the offences of money laundering
includes twenty five years of imprisonment under the Criminal Code or a fine of 315,000
Australian dollars or 1500 penalty units. Therefore, these are certain measures taken by the
Australian government in order to prevent money-laundering activities as it is considered to be a
serious offence. The money laundering is considered to be a serious offence which has
consequences as it directly effects the economy of the nation. Therefore, there are various
initiatives being taken by the government to decrease and prevent the crime (Choo 2015).
Conclusion
Therefore, from the above discussion it can be comprehended, that money laundering is a
serious offence as it poses a threat on the economy of a country. It is the process by which the
money that has been obtained through illegal activities are put in a legitimate system in order to
make it clean which can be used for legitimate purposes. Therefore, it poses a threat on the
economy of a nation and it is a serious offence. There are various regulations and rules that have
been enforced by the government in order to prevent such gruesome acts from happening but the

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consequences have not been effective. There are still ways by which the government can try to
reduce the crime rate by enforcing a more stricter regime and trying to implement stringent laws
which would help in imposing heavy penalties so that the offence can be reduced and prevented
eventually. This paper discussed the concept of money laundering and various ways the
government is trying to improve its regulations to prevent money laundering. This paper also
discussed the some weaknesses or certain lacuna which the government needs to improve on in
order to prevent the crime from happening further. Thus, in conclusion, it can be understood that
money laundering is considered to be a serious criminal offence which needs to be prevented as
it effects the financial status or the economy of a country.

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References
Hopton, D., 2016. Money laundering: a concise guide for all business. Gower.
Masciandaro, D. ed., 2017. Global financial crime: terrorism, money laundering and offshore
centres. Taylor & Francis.
Chong, A. and Lopez‐De‐Silanes, F., 2015. Money laundering and its regulation. Economics &
Politics, 27(1), pp.78-123.
Alexander, R.C.H., 2016. Insider dealing and money laundering in the EU: law and regulation.
Routledge.
Levi, M., 2015. Money for crime and money from crime: Financing crime and laundering crime
proceeds. European Journal on Criminal Policy and Research, 21(2), pp.275-297.
Liss, C. and Sharman, J.C., 2015. Global corporate crime-fighters: Private transnational
responses to piracy and money laundering. Review of International Political Economy, 22(4),
pp.693-718.
D'Souza, J., 2017. Terrorist financing, money laundering, and tax evasion: Examining the
performance of financial intelligence units. CRC Press.
Federal Criminal Code Act, 1995 (Cth) (Criminal Code).
Aziani, A., 2018. How Illicit Financial Flows Are Estimated. In Illicit Financial Flows (pp. 21-
37). Springer, Cham.
Pol, R.F., 2018. Anti-money laundering effectiveness: assessing outcomes or ticking boxes?.
Journal of Money Laundering Control, 21(2), pp.215-230.

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Choo, K.K.R., 2015. Cryptocurrency and virtual currency: Corruption and money
laundering/terrorism financing risks?. In Handbook of digital currency (pp. 283-307). Academic
Press.