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Australia may ease immigration rules as it eyes Chinese millionaires
Topic Started: 7 Aug 2014, 07:58 PM (469 Views)
peter fraser
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Australia may ease immigration rules as it eyes Chinese millionaires
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(Reuters) - Australia may ease rules on a visa scheme aimed at luring investment from wealthy Chinese to help clear a backlog of applications and in the wake of complaints that disclosure requirements are too strict, lawyers and migration agents said.

The 18-month-old Significant Investor Visa scheme offers residency to overseas individuals who invest more than A$5 million ($4.6 million) in Australia under a programme the government hopes will eventually raise A$6 billion a year. More than 90 percent of applicants are from China.

Finding the right balance is a challenge for the government, said Jerry Gomez, a lawyer and registered migration agent, especially at a time when China has launched a sweeping crackdown on corruption that has among other things targeted officials who transfer ill-gotten gains offshore.

"High net-worth individuals in China are very private in relation to their wealth," Rita Chowdhury, a member of the Law Council of Australia's migration law committee told parliament.

"They definitely have a lot of concerns about providing information about their financial circumstances to a government body. They also have suspicions that the Australian government could be passing that information to the Chinese government."

Approvals for the visas have progressed at a snail's pace.

By the end of June, just 286 visas had been approved compared with 1,497 "expressions of interest", according to data from the Immigration Department.

At least 20 percent of applications are either withdrawn or rejected, largely for want of more disclosures on the sources of funding, said Bill Fuggle, a partner at law firm Baker & McKenzie LLP.

"You don't want dirty money but you also have to give a reasonable guideline about how to prove that money is not dirty. The government is now trying to do that," he said. "At the moment, it's just a guess."


NEW RULES

Australia has said it wants to speed up approvals and lawyers and agents expect it to clarify rules on source of funding by specifying timeframe and evidence to prove the money is clean. It is also likely to allow more products for investments.

The new rules will likely be announced by November.

The government wanted "to facilitate rather than frustrate such investment programmes", a spokesman for Assistant Minister for Immigration and Border Protection Michaelia Cash said in an emailed response, though he declined to give details of the new rules.

The number of applications are set to rise after Canada cancelled a similar program this year, saying it "significantly undervalued Canadian" permanent residency. Wealthy Chinese are also being attracted by cash-strapped southern European economies, including Portugal, Spain, Greece and Cyprus.

However, China has recently been cracking down on so-called naked officials, whose spouse and children have emigrated. [ID:nL3N0O83PV]

Australia's immigration department told Reuters it was aware of the potential for "serious economic fraud" and said it refers suspicious matters to police. Some applicants are also reported to authorities in China or other home countries for background checks.

"Decisions to grant a SIV Significant Investor Visa are only made following careful and informed assessment of an applicant's financial circumstances," the spokesman for Cash said, referring to the Significant Investor Visa.


ILL-GOTTEN WEALTH?

Lawyers and agents said it was clear some applicants were trying to use the scheme to hide ill-gotten money, but the practice was not widespread and faced significant hurdles.

Applicants have to show audited accounts, tax returns, evidence of money held in bank accounts and that the transfer was done lawfully but it is not clear how far back one can go to prove the source of funds.

China limits foreign currency transfers by individuals to $50,000 a year but wealthy Chinese, including corrupt government officials, have managed to move their money out to snap up overseas property and other assets.

The country's central bank is looking into allegations by a state broadcaster that Bank of China, the country's fourth largest lender, has been laundering money offshore for clients. [ID:nL4N0PM0EC]

"A lot of people make inquiries and one of the first question put to them is do you have a credible audit trail because if you don't, then don't bother," migration agent Gomez said.

"You cannot run away from the question of your sources of funds. The government will not budge from that stance."
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cokatoo56
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"Australia's immigration department told Reuters it was aware of the potential for "serious economic fraud" and said it refers suspicious matters to police"

lol, yeah sure. like a drug addict with a bag of heroin on the table would say : i know drug is bad, so i will think twice before taking a load of it
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cokatoo56
7 Aug 2014, 09:11 PM
"Australia's immigration department told Reuters it was aware of the potential for "serious economic fraud" and said it refers suspicious matters to police"

lol, yeah sure. like a drug addict with a bag of heroin on the table would say : i know drug is bad, so i will think twice before taking a load of it
Are you referring to the same fraud that has funded our mining boom for the last decade.

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herbie
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At the risk of stating the obvious, I personally doubt that the types of properties those 286 approved parties bought is upping the prices on the houses most of us might hope to purchase in any way at all?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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van
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Maybe put the decision to a referendum? nah.... :)
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John Frum
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herbie
7 Aug 2014, 09:26 PM
At the risk of stating the obvious, I personally doubt that the types of properties those 286 approved parties bought is upping the prices on the houses most of us might hope to purchase in any way at all?
I agree, the luxury end of the market makes a good tabloid story but it's always fluctuated and never really influenced the rest of the market.

It's when they start buying up in solidly middle class areas with a 1-2 million dollar price-point - for example in sydney big parts of the north shore and the eastern suburbs - that you'll start to see problems, as that will ripple down to poorer ones when the original inhabitants of those areas are priced out and forced to relocate.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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herbie
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John Frum
7 Aug 2014, 10:09 PM
I agree, the luxury end of the market makes a good tabloid story but it's always fluctuated and never really influenced the rest of the market.

It's when they start buying up in solidly middle class areas with a 1-2 million dollar price-point - for example in sydney big parts of the north shore and the eastern suburbs - that you'll start to see problems, as that will ripple down to poorer ones when the original inhabitants of those areas are priced out and forced to relocate.
It's a funny ole world John - I was reading a report recently where Aboriginal Landowner Organisations in Redfern were saying to their 'constituents' (if that's the right word?) "Eff where we've lived 'traditionally' - Think of the loot! We can effing buy somewhere else."

Dunno - Lots of this shit's too hard for my head ...
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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