Australia - Threat Assessment - 2021 1 of 57 Australia - � “Don’t worry about the world coming to an end today. It’s already tomorrow in Australia” - Charles M Schulz Section 1 - Executive Summary ............................................................. Page 3 Section 2 - Country Information ............................................................ Page 4 Section 3 - Country Ratings .................................................................. Page 5 Section 4 - FCN Country Ratings ........................................................... Page 7 Section 5 - Key Harms Summary ........................................................... Page 8 Section 6 - Key Threats & Threats in More Detail ................................. Page 9 Section 7 - Sanctions & Embargoes ..................................................... Page 31 Section 8 - Terrorism & Terrorism Finance ........................................... Page 32 Section 9 - Money Laundering ............................................................ Page 37 Section 10 - Response ......................................................................... Page 43 Section 11 - Detailed FATF Results ...................................................... Page 50 Section 12 - Remittance Data .............................................................. Page 51 Appendix 1- Threat Types Risk Ratings ............................................... Page 52 Appendix 2- Sources ........................................................................... Page 53 Endnotes ............................................................................................. Page 54 This Global Threat Assessment for Australia 2021 is produced and published by Financial Crime News and all rights are reserved including copyright with Metriqa Limited. This GTA should not be used for commercial purposes without obtaining first a licence or express permission from the publisher. Authors & Contributors are John Cusack, Ursula M’Crystal, Hannah Cusack & Sophie Giles. Australia - Threat Assessment - 2021 2 of 57 Fraud: Fraud is thought to cost the Australian Australia � economy around AUS$6.3 billion per annum.3 The most common fraud types identified are Section 1 - Executive Summary revenue and tax evasion, superannuation fraud, card and financial transaction fraud. Grey Lists: Australia is not listed by the US as a Country of Primary Concern in respect of ML & Slavery: US Trafficking in Persons4 Tier 1; FC, and is not listed by FATF, and the EU on Global Slavery Index: Low incidence of their “Grey” lists. 0.6-1000 and government response of “BBB.” NRA: Australia has not published a National Sanctions & Terrorism: No Sanctions against Risk Assessment since 2011. It identified the the country. Tier 1 (Higher Threat) PPI Index key predicate offences in Australia as “fraud, rating with a good controls score of 966/1,300. drug trafficking, tax evasion, people smuggling, Australia is ranked 74/138 and scored “Low” at theft, arms trafficking and corrupt practices”. 1 It 2.148/10,000 in the Global Terrorism Index. also suggested that the process of money Tax Evasion: The latest estimates produced by laundering is intrinsically an international the Australian Taxation Office (ATO)5 suggest crime, with illicit funds being moved from that the tax gap in Australia is AUS$31 billion. It Australia to other nations. is estimated that 7% of overall tax revenue is Corruption: In Transparency International’s not collected by the ATO. 2019 CPI Australia ranked 11/198 with an Response & Resilience: Australia’s MER was overall score of 77/100. This was a rise in rank published in 2015, with a follow up report in from 12/198 in the previous year. 2018. Based on a simple scoring model Organised Crime: The Organised Crime in developed by FCN, Australia is rated at 65% Australia report (2017) by the Australian for technical compliance and 52% for Criminal Intelligence Commission2 identified effectiveness. Taking key areas only, scores are serious and organised crime in Australia to be 37% and 42% respectively. “destructive, pervasive and complex.” It Overall Ratings: Australia is rated overall estimated that serious and organised crime “Moderate” Risk, scoring 52/100 for financial costs AUS$36 billion a year. crime by FCN. The trend is currently rated as Drug Trafficking: Based on wastewater “Neutral”. Threats are rated as “Moderate” at analysis, AUS$11.3 billion was spent on drugs 54/100 and Responses rated “Moderate” at in Australia during the year ending August 50/100. 2019. The drugs noted as most prevalent are methyl-amphetamine, cocaine, MDMA and FCN Rating: 52/100 Moderate Risk heroin. The cannabis market is also significant. Trend: Neutral Australia - Threat Assessment - 2021 3 of 57 Section 2 - Country Information - � People & Geography: Australia is made up of top exported goods were ores (35.9%), five distinct areas or territories; Western mineral fuels (25.7%), gems and precious Australia, the Northern Territories, Queensland, metals (7.7%), meat (4.1%), inorganic South Australia, Victoria, and New South Wales chemicals (2%) and machinery (1.7%). The - in which the capital Canberra is. It has a biggest buyers of Australian goods are China population of 25.36 million, the majority of (43%), Japan (9%), the US (6.2%), South Korea whom live in urban areas such as Canberra, (6.2%), the UK (4.9%), India (3.4%), and New Sydney, and Melbourne. Australia boasts a Zealand (3.3%). Imports in 2019 to the value of wide range of bio-diversity with deserts, AUS$ 334,279 for refined petroleum, cars, rainforests, snow-capped mountains and crude petroleum, broadcasting equipment, highly fertile grass lands. First Australians lived delivery trucks with the biggest partners being on the continent for around 65,000 years China 25%, United States 12%, Japan 7%, before western colonisation, which began in Germany 5%, Thailand 5%7. the early 17th Century. It was claimed for Great Crime: Australia was 18th out of 128 in a Britain as a colony in 1770. ranking of the Worlds Safest countries8, which Recent History & Leadership: Whilst Australia is relatively high for the Asia Pacific region. An has been independent of the United Kingdom estimated 4.7% (939,200 people) of the since 1901, it was not until 1983 that the Australian population experienced crime in Australia Act was passed, making Australian 2019-20.9 467,800 people experienced Law fully independent of the British parliament physical assault, 492,900 experienced face-to- and legal system. In 1999 a referendum to face threatened assault, and 238,100 make Australia a republic was defeated. The households experienced a break-in. The majority of governments in Australia have number of people in Australia experiencing tended to be elected for multiple terms, assault has been trending downwards for the testifying to general contentment. First last decade. Australian's remain marginalised, making up Finance: In recent decades, Australia has 28% of prisoners in Australia, whilst accounting become an internationally competitive, for 3.3% of the population. advanced market economy due in large part to Economy & Trade: Australia has the 5th economic reforms adopted in the 1980s and largest economy in the Asia Pacific region with its location in one of the fastest growing a GDP of US$1.397 Trillion (2019) and regions of the world economy10. Australia is a government revenues of AUS$513.7 billion. major regional and global financial centre, and The Australian economy is dominated by the is one of the IMF’s 29 systematically important service sector; generating 62.7% of GDP and financial centres.11 In Australia12 99.5% of employing 78.8% of the labour force. people (over 15) have bank accounts, 59.7% Agriculture and resources contribute 3% and have a credit card, with internet users making 10% to GDP respectively. Australia has the payments online at 75.6%. Remittances global record for uninterrupted global growth inbound in 2017 were approx US$I.941 million with the March 2017 financial quarter marking (0.14% of GDP) according to the World Bank.13 26 years since the country had a technical For more details on remittances see Section 12 recession. Australia shipped A$404.562 billion below. worth of goods around the world in 2020.6 Its Australia - Threat Assessment - 2021 4 of 57 3. Country Ratings & Country Risk Heat Map - � Available information from leading sources produce almost 50 ratings for Australia, covering both threats and responses in fighting financial crime, sanctions, proliferation finance and terrorism & terrorism finance. No. Threats Australia � No. Responses Australia � 1 GDP - Economic Size * Large Sized Advanced Economy 1 OECD - Global Forum * Compliant GDP per Capita US$1.3 trillion (1.01% Global GDP) on Transparency & Exchange Info for Tax Purposes 2 World Economic Forum * 89.8 (2019 - 18/141) 2 Global Slavery Index * BBB Security (OC, Terrorism, Homicides, Policing) (76.9/99.2/99/84.2) Country Response Rating (ratings from AAA, AA, A, BBB) 3 World Economic Forum * 76.9 (2019) 3 US Dept of State * Tier 1 Organised Crime (24/141) Trafficking in Persons 4 Numbeo Crime Survey 2020 41.36/100 4 Proliferation Index - PPI * 966/ 1300 72/133 (1 being the worst) Controls Good Controls score 5 US Inst Health Metrics and Evaluation 2018 469,432 (2017 - +38% since 1990) 5 Global Cybersecurity Index 0.89 Illegal Drug Dependency / Disorders * 2.23% (2017 - +0.1% since 1990) 2018 10/175 Number/Share 6 Transparency International (TI) Corruption 77/ 100 6 World Bank Regulatory Quality * 1.87 Perceptions