More than a third of the country’s $2.6 trillion offshore financial industry is involved in money laundering, drug trafficking and terrorism-related activities, a new report by a cross-industry think-tank has found.
The Australian Financial System Integrity Project, which surveyed more than 400 international organisations and institutions and was launched last month, found the financial industry was also a hot spot for money-laundering and terrorism.
It found most of the industry’s activities, which include the creation of overseas accounts and the creation and transfer of financial assets, were linked to money laundering.
The industry is also a target for money and drug trafficking, the report found.
“This includes the creation, transfer, creation and use of financial instruments, including money transfers, in Australia, as well as activities relating to the transfer of funds,” the report said.
The report, based on information from a survey of more than 500 organisations and other sources, also found the industry was a target of terrorist organisations.
The AFSIP has conducted research and interviews with more than 120 of the sector’s top global and local experts on the money laundering activities of offshore financial institutions, which are largely based in Australia.
The key findings are:The AFAICP said the industry had not stopped money laundering in recent years.
But it said it was not yet confident that money laundering was effectively curbed.
“We need to continue to work with law enforcement agencies, regulators and industry groups to develop policies and strategies to address the challenges associated with money laundering across the industry,” it said.
“It is critical that we are confident that all relevant stakeholders, including regulators, financial institutions and industry, are committed to the work we are undertaking.”