Australia's SIV scheme a target for money laundering

China’s state broadcaster CCTV has launched an extraordinary attack on one of the country’s most powerful government controlled financial institutions – the Bank of China, accusing it of money laundering in Australia, via the country’s Significant Investor Visa Program.

“We don’t care where your money is from or how you earn it, we can help you get it out of the country,” a Bank of China employee told CCTV. “We don’t care how black your money is or how dirty it is, we will find ways to launder it and shift it overseas for you,” according to a detailed CCTV investigative report.

Australia is a centrepiece of the investigation due to the country’s Significant Investor Visa program, which offers an accelerated pathway for wealthy investors to gain permanent residency by investing $5 million in Australian bonds, funds or a small business. Chinese nationals account for nine out of 10 applicants since the program was introduced under the former Labor government.

The Bank of China did not respond to requests for comment from Business Spectator about the CCTV report into the Bank of China’s involvement in money laundering.

Under China’s stringent foreign exchange law, citizens are only allowed to send $US50,000 or $A53,000 abroad per year. Australia has been repeatedly been mentioned as the destination of “grey money” coming out of China in relation to Australia’s significant investor visa program.

CCTV undercover footage clearly shows the Australian national flag on a Bank of China stand at a busy immigration show, advertising Australia as an important destination for investors. Social media posts from major media outlets about the story prominently feature a picture of a map of Australia.

Business Spectator understands that the China Banking Regulatory Commission has intensified its investigation into money laundering and has recently signed an agreement with US authorities that allows greater information sharing about bank account details.

The CCTV report accuses the Bank of China of money laundering via a scheme called ‘You Huitong’, translated as You Uncapped, which allows wealthy Chinese to circumvent Beijing’s strict currency controls. “You Huitong is a shadowy business,” CCTV says. “It is unbelievable that such a big bank is violating the law to fill its own pockets.”

Business Spectator understands that some private bankers from Australia’s big four banks have been aware of the ‘You Huitong’ service for a year.

An investigation by Fairfax Media last November reported allegations that a prominent Chinese businessman used his private jet to ferry suitcases of cash and deposited them at a local Bank of China branch in Melbourne.

“[He] telephoned me and said that he had just arrived in Australia with cash and that I should immediately meet him at the Bank of China at Melbourne to collect the $800,000 which he had changed from US dollars at the bank,” the businessman said in an affidavit to the Supreme Court, as reported in Fairfax Media.

A senior manager with one of the big four Australian banks told the CCTV reporters that the Bank of China was crucial to the bank’s migration business.

“The money is very safe and will leave the country in a very grey channel. The Bank of China is the same as an underground bank [a Chinese term for black market operators that launder money],” he told CCTV.

He said the Bank of China has a huge business network abroad and only the Bank of China could carry out operations on such a large scale.

“Because of the country’s foreign exchange controls, they are doing it very discreetly.”

The Bank of China does not officially advertise its uncapped foreign exchange transaction services, but it is widely known amongst immigration agents and private bankers. Chinese experts and commentators have slammed the Bank of China’s alleged illegal activities and the story has caused waves on Chinese social media.