Symes, Christopher --- "Money Laundering in Australia edited by W. Weerasooria, N. Jensen and J. Visser" [2000] AltLawJl 17; (2000) 25(1) Alternative Law Journal 45

• Reviews
• Money Laundering in Australia

Reviews

_{Money Laundering in Australia}

edited by W. Weerasooria, N. Jensen and J. Visser; Prospect Media

Ply Ltd, 1998; 119 pp; $145.

Money Laundering in Australia is the proceedings of a national seminar on the role of the finance industry and law enforcement in combating money laundering. Unfortunately only one side of each page is printed and so it is a touch environmentally unfriendly! With 12 chapters, each by a different author, the book has the disadvantage of different length chapters and different writing styles. However, the advantage is that different authors can bring their experience of the subject matter to print.

The final pages of the book are dedicated to contributors' profiles, an extensive bibliography and a helpful index.

During the conference it was acknowledged that the finance industry is in the strongest position to detect unusual transactions and to work with the enforcement agency, AUSTRAC, to combat international money laundering. Money Laundering in Australia has contributions from members of the finance industry such as employees of banks and their professional association, the Australian Federal Police, National Crime Authority, prosecutions units of the government, and academics.

Chapter 1 introduces the anti-money laundering movement from a global perspective. Ms Montano, the Director of AUSTRAC, traces the present actions by such organisations as the Asia Pacific Group on Money Laundering, the Financial Action Task Force of the G7 Nations, the IMF and the World Bank.

Chapter 2 provides the police view­ point. Neil Comrie, Chief Commissioner of Police for Victoria raises the issues confronting law enforcement agencies and specific legislation, such as the Victorian Crimes (Confiscation of Profits) Act, that exists to give police power to pursue money-laundering investigations. He outlines the Victoria Police response in establishing its own Asset Recovery Squad to minimise the impact of organised crime on the com­ munity by providing the investigative skill and support in the investigation, identification and recovery of tainted property and the proceeds of crime. He concludes that the cooperative approach between police and AUSTRAC will result in better investigation and results. He appears to forget the finance industry and what help they could be to police.

In Chapter 3, Professor Richard Fox of Monash University embarks on a description of the history of Common­ wealth crime statutes and bemoans the lack of Commonwealth power over criminal law. He notes that the Commonwealth has had to resort to using the national interest and the external affairs power to achieve what it has. He observes that the 'legislative means of combating money laundering cannot focus only on one or two pieces of legislation such as the Financial Transaction Reports Act ... [but needs] ... a broader legislative assault which addresses the investigative prosecution and enforcement needs of all those who are stakeholders in the justice system'. It is somewhat comforting that Professor Fox reports: 'the expansion of federal criminal power is continuing unabated despite ... constitutional limitations'. He notes the planned model Criminal Code and its likely impact, and the appalling situation in the Seychelles where they legislated to become a money-laundering haven! This chapter is informative, brief and readily understandable to readers of all backgrounds. It is the strongpoint of the book.

The next six chapters go into the specialised areas of law enforcement and the financial industry. Some chapters, like Mervyn Keehn's chapter on the cooperation between law enforcement and the finance sector, provide useful anecdotes and demonstrate the real need for other professionals to con­ tribute to law enforcement in this area. Other chapters, like John Murray's chapter on risk management, seem knotted up in jargon and disconnected from the real problems. Despite this, all of these chapters give helpful insight into the way the finance sector ticks, particularly when forced into a mode of operating by a legislative regime, for example, the tension between keeping banker-client confidentiality and making disclosures of what appear to be suspicious transactions.

Chapter1 0 commences with Aub Chapman of Westpac giving a very general summary of banking in Australia. Importantly, he recognises that the identification of illegal activity within the corporate business environment is becoming more difficult. As he says, 'the traditional paper trail simply does not exist. The ability of the "corporate crook" to mask illegal activity has been enhanced by the changing financial systems environment.' And he further notes that criminals have been clever in the ways they have found to blend their illegal activities with their legitimate commerce. Mr Chapman addresses two very interesting features of money laundering. First, he claims that the public does not view it as being acceptable, but there is a very real reluctance by most in the community to become involved. He states that in relation to financial information many customers express anger when they discover personal information has been reported to government departments and agencies. Second, he demonstrates the costs to the finance sector of retaining, and retrieving records. Archiving is being outsourced and so to recover a record it is no longer a matter of sending a junior to find it. Westpac's submission to the Wallis Inquiry stated that retrieval of records for law enforcement investigations costs $1.23m per annum and rising. He concludes by demonstrating what his bank is doing to facilitate cooperation with law enforcement agencies.

In a well-written chapter, Rick McDonell of the Asia Pacific Group on Money Laundering, notes the futile attempt to estimate the size of the problem. He continues by examining the methods of laundering, claiming the banking system remains one of the most important vehicles for money launderers. Here, the reader gets a real insight into how to money launder: that is, the launderers' use of non-bank financial institutions and others that are subject to fewer regulatory requirements. Mr McDonell also explains how launderers use legitimate businesses and create false invoices, co-mingle the legal and the illegal, use loan-back arrangements and use layers of transactions through offshore shell companies. He volunteers that electronic money also has the potential to make it easier for criminals to hide the source of their proceeds and move them without detection. This chapter puts the reader fully in the picture and gives detail appropriate to a book on the topic. It also has an international coverage.

The final chapter is surprising. What Associate Professor Wicky Weerasooria -a well-known banking and finance law academic and co-editor of this book-has written is essentially a case note of Leask v The Common­ wealth. The case deals with s.31 of the Financial Transaction Reports Act of the Commonwealth. As expected from a casenote, the law from the section and the details of the case are well covered but a broader picture of the law is sadly lacking. Associate Professor Weerasooria could have completed the book with a better 'wrap up' and 'sold' the reader on the topic.

The book is recommended for those who have an interest in money laundering, corporate crime, privacy and criminal investigation. It will also be of interest to people across the finance sector. The publishers should be congratulated for putting conference proceedings into the public domain.

CHRISTOPHER SYMES

Christopher Symes teaches law in the School of Commerce at Flinders University.