25 July 2003

Interview with Paul Murray, 3PR

Note

SUBJECT: Money Laundering Conference

MURRAY

A major conference taking place in Sydney today. It's of a group called the Egmont Group. Now, the Egmont Group are companies around the world who have banded together to try to fight global money laundering. It's a massive problem around the world.

The meeting today will be attended by some 200 delegates; they come from 80 jurisdictions and 10 international organisations, involved in the fight against money laundering and also the financing of terrorist activities. Addressing the meeting today will be Senator for Western Australia, Senator Ian Campbell, he's the parliamentary secretary to the Treasurer and it's in that capacity he'll talk to them today. Ian Campbell's on the line now.

(Greetings omitted)

MURRAY

Ian, how big a problem internationally is money laundering?

CAMPBELL

Well, the research we've got shows that it's up to $2 trillion or nearly 2% of world gross domestic product, combined domestic product so it's an enormous amount of money. I think in the current environment the biggest risk however is that this money can go into significantly undermining society, these are monies from drug trafficking, from serious fraud and most importantly at the moment this is money that can flow into terrorism and finance terrorism.

MURRAY

Well, how is the fight against money laundering handled internationally?

CAMPBELL

Well, what's happen particularly since September 11 and of course the Bali bombings is that there's been a huge international focus by organisations such as the International Monetary Fund, the World Bank and governments such as the Australian Government to set up focused units within the government to put in place systems that can track money flows, that ensure that if people open up bank accounts they've actually got to be real people and to put in place sophisticated systems to track down money flows and to make it very hard for criminals to use the financial system to process their ill-gotten gains.

MURRAY

I know the Prime Minister when he was putting forward the case for our intervention in the Solomons raised the prospect there that it could become a haven for terrorism and I think he even raised this situation; Is this one of the problems that there are little pockets of places around the world that can harbour this sort of activity?

CAMPBELL

It's quite right and the Pacific Islands, which are I guess from a Perth perspective where you and I live and your listeners live, the Pacific seems a long way away because we're divided by the Australian continent, but here in Sydney where I am today traditionally there have been countries in the Pacific that have been havens for money laundering and potentially terrorism financing, so having good government structures, good governance structures in our neighbourhood is a vital thing and Australia can play a role here; One, because we're respected internationally, we've got good systems in Australia. Secondly, we've got the financial resources to provide some assistance.

The other thing is Paul, I think a lot of Aussies sort of think you know why are we giving all this money and aid to these countries when we should be spending it at home? I think on your program yesterday you were talking about what can we do with $300 million in Australia as opposed to going to the Solomons? The reality is we can actually use that aid money as a bit of a leverage to sort of say, look, if you want to get some money from Australian taxpayers then you've got to improve your own game and we do that unashamedly. We're saying to these countries if you want support from Australia and New Zealand and America and other countries, you've got to lift your game, you cannot have system in place which will allow terrorism financing to flourish and I can say from just coming back from a meeting of Finance Ministers of the Pacific Islands in the Marshall** Islands last month that there is a huge increase in their focus on this problem. They realise that they're not going to have growing expanding economies that welcome foreign investment and foreign aid if they are seen as havens for terrorism financing. It's a real risk.

What I will be saying at the conference this afternoon is that you can obviously from a media perspective having troops landing on beaches and stuff is the front line fight against terrorism and instability in the Middle East and in our own backyard in the Pacific, but cutting off the flow of money is probably the most important frontline in the fight on terrorism; they rely on large amounts of money to finance their operations and their bomb building and their information systems. If you can cut that flow off then they'll be out of business and that's what this conference in Sydney today is all about.

MURRAY

You're talking today to this group called the Egmont Group, now in terms of say the question will banking practices we've seen in places like the Marshall** Islands, we've seen in places like Vanuatu, they've allowed the set up of online gambling and things like that which mightn't be allowed in Australia but you can access it through there. Are these sort of small Pacific Island states do they fall under the Egmont Group?

CAMPBELL

Well, part of what we're doing today is ensuring that countries such as Pacific Island nations are encouraged using those levers that I've just described, aid and assistance and foreign investment flows to say that if you don't have membership of a group like Egmont, if you don't comply with these international best practices which are being fined tuned here in Sydney today then you will not get assistance and so the Egmont Group and the establishment of what are called financial intelligence units within these governments are going to become absolute prerequisites to receiving assistance from the IMF or the World Bank or bilateral aid f4om countries like Australia, so very, very important that you have a net that hasn't got any holes in it because if you have a hole in that network the terrorists and other criminals will leap through it.

MURRAY

But if the problems the size you outlined at the front of this program and that's $2 trillion, if that's the size of it you'd have to suspect that some of the big players are actually heavily involved in this, not just the little island nations.

CAMPBELL

Well, I think the problem is you can have, and I don't want to pick on the Pacific Islands because quite frankly they have done an enormous amount over the last 18 months to lift their game in their own interests as well as in the interests of the international world, but you only need a small chink in the armour, be it a small nation wherever that nation be for organised crime to use that as a haven. I mean you effectively only need an electronic post office box to work through and that's what this meeting is designed to do, is to create a network which clearly if people are getting through it it'll be very easy to identify and close down.

MURRAY

Ian, the host to today's meeting is Austrac which is our financial intelligence unit, many Australians mightn't be familiar with Austrac, just give us a brief rundown of what it does?

CAMPBELL

Well, Austrac is basically an organisation, it's got a whole range of responsibilities but one of it is to ensure that the flow of finances is handled in a legislative regulated way; it seeks to be able to pick up financial transactions which are out of the norm and in fact a number of prosecutions have been executed in Australia where people have tried to slip through nets. There are requirements for example that any funds over $10,000 need to be...any transactions over $10,000 need to be reported to Austrac by the financial institutions in Australia. Some people as you may know try to sort of shift funds around in amounts of $9999 and a number of prosecutions which I'm familiar with get picked up because people try to avert those rules, so it affectively keeps a close watch on the flow of funds around the Australian and financial sector and of course across borders and what we're doing today is to make sure that that sort of activity in Australia is replicated in every nation around the world and organisations such as Austrac can have system in place to communicate in real time with their like bodies in other nations so that you've basically got a system that'll pick up crime before it happens.

MURRAY

Yeah, as I understand it it even does things like it has sophisticated intelligence network whereby it can pick up stock market trades that fit certain profiles and it gets automatic alerts sent to it to you know 'maybe we should have a look at this one?'

CAMPBELL

It does indeed and part of what I'm doing here in Sydney today is visiting the stock exchange. They've got a system in place that does that and it's not only used for tracking down this sort of crime, it's also used for tracking down potential insider trading cases.

MURRAY

Sure. Thanks for talking to us Ian.

CAMPBELL

Thanks for the opportunity Paul.

MURRAY

Senator Ian Campbell, parliamentary secretary to the Treasurer just outlining this big conference on money laundering and terrorist financing in Sydney today.