Christian Aid is using the image of Russian dolls as many of those involved in money laundering and tax dodging keep their money in phantom firms – a complex network of trusts and shell companies – in order to conceal the real owners.
The Justice and International Mission (JIM) Unit of the Commission for Mission has made a submission to an inquiry by the Australian government into tightening Australia’s anti-money laundering laws.
The government is proposing to increase the responsibilities of banks, casinos and money transfer agents to better know their customers in order to notify authorities of suspicious transactions.
The proposals involve tightening rules around assessing transactions with government officials, politicians and their family members. The aim is to stop transfers of money stolen through corruption being laundered through Australia.
Sam Koim is the head of the PNG Government anti-corruption body Task Force Sweep. On a recent visit here, he called Australia the “Cayman Islands in relation to laundering and housing the proceeds of corruption from Papua New Guinea”. He stated that Australia has never repatriated any proceeds of corruption to PNG.
Mr Koim said where it was not possible to conduct a “means test” on a person from PNG transferring funds to Australia (to establish how the money was generated), “we ask that you refuse to perform the transaction and that you terminate the business relationship”.
The submission referred to the US prosecution of Liberty Reserve, a Costa Rica-based digital currency service described by US authorities as “a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes”.
Of the 45 bank accounts for which the US obtained seizure warrants or restraining orders during the case, three were Westpac accounts with holdings of up to $36.9 million in total.
It is alleged that these holdings are connected to shell companies owned by Liberty Reserve. The submission states that this may point to inadequacies in Australia’s anti-money laundering laws.
Liberty Reserve was estimated to have had more than one million users worldwide. From 2006–2013, it was used to process an estimated 55 million separate financial transactions to launder more than $6 billion in criminal proceeds.
The Uniting Church submission noted the view held by the World Bank, that demonstration of political will by governments is vital in the effectiveness of anti-money laundering efforts. In addition, that “in the absence of such political commitment, some banks will not be motivated to make a meaningful commitment to improving customer due diligence procedures with a view to detecting the proceeds of corruption.”
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