Australian laws allow real estate corruption says report

by Steve Randall05 Apr 2017
Australian laws allow real estate corruption says report
Australia is one of four countries where loopholes in the law make it easy for corruption in the real estate markets according to a new report.

Transparency International analyzed Australia, along with the US, UK, and Canada; and found several weaknesses in regulations and laws which allow money laundering and other issues related to luxury property.

The study says that none of the four jurisdictions are meeting international monitoring obligations for anti-money laundering while only the UK requires professionals including real estate agents and lawyers to identify the beneficial owners of real estate as part of due diligence procedures.

That means that trusts and other legal entities can purchase real estate without an actual person being identified. Furthermore, foreign companies can purchase real estate without providing details of their real owners, except in Australia but even then, not in relation to money laundering.

There is also an over-reliance on financial institutions carrying out money laundering checks for real estate transactions. This varies across the four jurisdictions but can mean that cash purchases do not have the same level of monitoring.

Even where there are requirements on real estate professionals to conduct anti-money laundering checks, compliance and enforcement is often weak and Transparency International also found that none of the four jurisdictions has a “fit and proper” test for professionals working in real estate.

Although Australia has checks in foreign investors in property, there are no requirements to disclose beneficial owners hiding behind entities. The report also highlights that lawyers and other professionals are not subject to the provisions of the Anti-Money Laundering and Counter Terrorism Financing Act 2006.

Asia Pacific remains global epicentre of IPO activity
Asia Pacific has led the gains for global IPO activity so far in 2017 analysis from EY shows.

The region, led by Greater China, saw 70 per cent of the IPOs by volume and 48 per cent by global proceeds in the first quarter with 182 hosted by China. Australia hosted 23 of the IPOs, just short of Japan’s 27.

“IPO activity in Asia-Pacific has been powering ahead due to the region’s relative insulation from political uncertainty elsewhere in the world, ample liquidity in emerging markets and strengthening investor sentiment on the back of reduced volatility and steady stock market gains,” explained EY Asia-Pacific IPO leader Ringo Choi.

He added that outside of Mainland China and some ASEAN exchanges there may be a slowdown in the second and third quarters before a rebound in the fourth.

Client leaves Morgan Lewis due to Trump link
An investment fund has ended its relationship with Morgan Lewis due to the law firm’s representation of Donald Trump.

Wallace Global Fund said that the law firm has legitimized what the fund claims is a false separation of the US president’s business interests and his public office.

The Wall Street Journal says the fund’s co-chair Scott Wallace wrote to Morgan Lewis partner Sheri Dillon and said that the law firm’s appearance at a press conference in January did not solve the president’s “conflict of interest.”

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