To be sure, the CBA money laundering scandal is a big deal. 53,000 cash deposit breaches is disturbing no matter which way you cut it.

But there is one money laundering honey pot that continues to be ignored by policy makers, which should garner far more outrage from the public: Australian property.

In 2015, the global regulator of money laundering – the Paris-based Financial Action Taskforce (FATF) – released its mutual evaluation report which found Australian homes are a haven for laundered funds, particularly from China.

Then in March this year, Transparency International ranked Australia as having the weakest anti-money laundering (AML) laws in the Anglosphere, failing all 10 priority areas.

And in June, FATF placed Australia on a watch list for failing to comply with money laundering and terrorism financing reforms.

Legislation to implement the second tranche of anti-money laundering (AML) legislation covering real estate gate keepers has been gathering dust in Canberra for a decade.

Accordingly, realtors, lawyers, accountants and other real estate gate keepers are currently exempted from AML requirements. And this exemption has provided an easy avenue for foreign buyers to launder funds through Australian property.

Perversely, if somebody wants to set up an account to place a $100 bet at Sportsbet, or invest $1,000 into a managed fund, then they must provide sufficient identification under the AML Act. But if they want to launder millions of dollars through an Australian home, few questions are asked. It makes absolutely no sense.

The Australian Government is currently undertaking yet another consultation on implementing the second tranche of AML legislation, and had promised to finalise the new rules by the end of this year. However, the Government set similar deadlines 2008, 2010, 2012 and 2014, all of which failed to deliver legislation. And now it looks like it will fail yet again.

Now, the OECD Working Group on Bribery in International Business Transactions has joined the conga-line urging Australia to implement the second tranche of AML legislation covering real estate. From The AFR:

The OECD has followed the lead of the FATF and highlighted the fact that under Australian law, real estate agents, accountants and auditors, members of the legal profession, and other Designated Non-Financial Business Professionals (DNFBPs) are not subject to Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) obligations.

In other words, the entire ecosystem for the buying and selling of property using cross-border fund flows is beyond the reach of regulators…

Until the government takes action the sole gatekeeper for determining the integrity of real estate transactions involving foreigners is the Australian banking system. That clearly worries the OECD.

It does not believe the major financial institutions provide sufficiently robust protection against Australia being used as a place for laundering corrupt funds…

Professor Sharman, who is the Patrick Sheehy Professor of International Relations at the University of Cambridge, this year published The Despot’s Guide to Wealth Management (Cornell University Press).

The book argues that “the vested interests of banks, lawyers, and even law enforcement often favour turning a blind eye to foreign corruption proceeds”…

The OECD suggests there could be a greater role for the Foreign Investment Review Board in policing against corrupt money being laundered through real estate.

It says FIRB “could potentially play a greater role in detecting and reporting suspicious transactions in the real estate sector, and leverage available information from the Australian Taxation Office, AUSTRAC and the Australian Federal Police to act on suspicious transactions relating to foreign investments.”

It seems lobbying pressure from industry rent-seekers is largely to blame for the lack of political action. Just consider “Highrise” Harry Triguboff’s comments in July in The AFR regarding Chinese buyers:

“The problem with Australians is they are very slow. They ask their lawyer, they ask their financial adviser, they ask their family, they ask everybody. The Chinese don’t ask anybody, they come off the plane, buy their unit and go.”

In other words, we can’t have proper checks because that would slow down sales.

By failing to ratify the second tranche AML rules, as promised more than a decade ago, the Australia’s Government is tacitly complicit with the dirty foreign money flooding into Australia’s homes and robbing young Australians of a housing future.