In its April 2015 Mutual Evaluation Report of Australia, the Financial Action Task Force (FATF) indentifies the real estate sector as an attractive destination for laundering the proceeds of crime. This coincides with an article published by Fairfax media alleging a Melbourne apartment complex has been used to facilitate the payment of bribes to Malaysian officials.

But how does this affect you? Essentially, this highlights the need for developers to understand their own potential liability if they are found to have facilitated (knowingly or not) such a transaction.

Australia has a number of laws aimed at preventing and discouraging money laundering, the majority of which are found within the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Criminal Code Act 1995.

These cover a wide range of conduct including possessing, concealing, receiving and disposing of money or property defined as a proceed of crime or that may become an instrument of crime.

Under the Criminal Code the requisite mental element for money laundering offences is knowledge, negligence or recklessness. For a company these conditions can be established if a company is proven to have authorised or permitted the occurrence of an offence, whether expressly, tacitly or just impliedly. More importantly, it is possible to prove so merely by indicating steps to maintain a culture of compliance were not adhered to.

So what are the penalties?

Penalties under both laws depend on the value of the assets involved, with the Criminal Code depending also on the state of mind of the defendant. From 31 July 2015, the maximum penalty under the Criminal Code for a corporation is $1.35million – this applies where the value of assets involved totals great than $1million. In addition under the Proceeds of Crime Act, assets can be confiscated with the onus on the developer to prove the purchase monies were not a proceed of or instrument of crime. This may occur even if monies were received unknowingly and have been dissipated in the business.

If you have any questions in relation to your requirements as a developer feel free to contact me at or call (07) 5444 1022 to book an appointment.