Thank you for the invitiation to speak as part of this regulatory series. I am pleased to join my other regulator colleagues who have spoken previously. I am addressing you today here on Gadigal land. I extend my respects to any elders present and acknowledge the traditional owners of the land, past and present, and their unbroken connection to country.

AUSTRAC is Australia’s anti-money laundering and counter-terrorism financing regulator as well as Australia’s financial intelligence unit.

Ultimately, we are working to prevent harm to the community. Money-laundering funds are generated by the very worst criminal behaviour and those funds are reinvested back into that behaviour, creating a thriving criminal underworld.

The volume of crime associated with money laundering activities is enormously significant. Serious and organised crime is costing Australia more than $68 billion every year. Global estimates put the figure at $2 trillion. 

The value of the domestic illicit drug market alone is worth at least $12.4b dollars per year. On top of drugs we see tax fraud generating between $1.8b and $6.3b a year as well as more than $2b in profit from scam proceeds. The value of illegal funds in Australia is significant, not only are we combating the proceeds of crime from Australian criminals, Australia is also an attractive place for major organised crime groups to launder money and store wealth. Australia’s illicit tobacco market is driven by high demand and large potential criminal profits. The most recent estimates suggest the illicit market cost Australia approximately $2.7 billion in lost excise revenue in 2022-23.

As you might also know from media reporting, the illicit tobacco trade has sparked a violent tussle, the so called ‘tobacco wars’ which have erupted between crime groups trying to control the trade. There have been numerous fire bombings and other violence.

All this money then needs to be laundered through the Australian economy, every single year. The people who do that are persistent, innovative and professional. Not only do we deal with international criminal networks but we are dealing with international money laundering organisations.

Money laundering is a major component of virtually all criminal activity and adversely affects the Australian community in numerous ways. It perpetuates serious crime by enabling criminals to reinvest in further crime. Money laundering also undermines the integrity of Australia’s financial system and other industry sectors and has the potential to damage the credibility and reputation of Australia’s regulatory and law enforcement agencies.

Australia is an attractive destination to store and integrate criminal proceeds because of its stable political system, independent legal system, well-developed financial services sector, and strong real estate market. Criminals continue to use established channels such as cash, luxury goods, real estate, domestic banks, casinos and remitters to launder funds in Australia.

Specialist money laundering organisations are increasingly global in their reach, linking crime groups around the world and enable these criminal groups to develop in sophistication.

Transnational crime is increasingly complex and global in nature. By definition, transnational crime groups are not limited to any one country, and generate profits from criminal ventures globally, meaning they can look to launder illicit funds from all over the globe through Australia, or through jurisdictions with comparatively weaker controls. Movement of money and property between different financial systems and commercial hubs has proven to be an effective mechanism to disguise the illegitimate origins or uses of criminal wealth.

We’re not just dealing with crime networks anymore—we’re facing distinct money laundering organisations that compete for contracts, probe our defences, and exploit any regulatory gaps they can find. They are specialist money launderers with every trick up their sleeves who bid against each other for work and look for holes in our financial controls so they can launder through them.  

The methods used by criminals to launder their dirty money are constantly changing, but we are evolving to meet these challenges. The AML/CTF legislation was amended late last year which will bring on a range new industries into our regime. These include real estate businesses, accountants, lawyers, conveyancers, trust and company service providers, and dealers is precious stones and metals.

AUSTRAC currently regulates over 19000 businesses, , but that number will rise to more than 100,000 as we bring on our new entities.

We’re currently finalising what the Rules look like and have been strongly engaging with industry to co-design these.

AUSTRAC recently released our new regulatory priorities that outline where we will focus the majority of our regulatory efforts. These priorities are outcome focussed and enable businesses to understand their obligations and ensure they are appropriately managing their risks.

I also released a statement of regulatory expectations in early July regarding what AUSTRAC expects current and future reporting entities to do, to prepare for these reforms, as well as what support and guidance AUSTRAC will provide to support businesses.

Financial crime is a major threat to Australia and our region, were proud to play our part in tackling that threat head on and pleased to work with you all to strengthen our financial system against exploitation from criminals.