By Rob Taylor
CANBERRA--Australia's government believes changes to visas
offering rich foreign investors a fast track to residency in return
for multimillion-dollar capital infusions will better combat
potential corruption.
Australian police, meanwhile, confirmed it's working with
Chinese authorities to trace illegal assets in the country.
The conservative government this month announced a new Premium
Investor Visa, or PIV, offering a faster 12-month pathway to
permanent residency for people investing A$15 million (around $13.2
million) or more into Australia. The aim is for the money to go
into higher-risk infrastructure priorities rather than lower-risk
sovereign bonds and managed funds.
Both China's government and Australian investment experts raised
concerns the visas, which build on an existing plan offering
residency in four years for people investing at least A$5 million,
could potentially offer a haven for corrupt officials that Beijing
has been trying to crack down under President Xi Jinping in an
operation dubbed 'Fox Hunt.' China's Foreign Ministry spokesman
Hong Lei said during a news conference on Oct. 13 that the visas
should not allow "corrupt elements to have shelter overseas."
"The scheme in the past has been open to abuse. It's been a
disgrace and they needed to do something," said a senior manager of
an Asia-focused investment fund.
The office of Australia's Assistant Immigration Minister
Michaelia Cash, who is also a senator, told The Wall Street Journal
that the government had "robust integrity measures in place" to
ensure visa programs were not targeted by economic fugitives or
used for money laundering after a review in March this year of the
existing second-tier Significant Investor Visa, or SIV.
Australia introduced SIV visas two years ago and the
overwhelming majority of applications--more than 80%--have come
from China. More than 436 have been granted from 1238 applications,
with more than A$2 billion poured into complying investments,
immigration department figures show.
"The (immigration) department remains aware that there is
potential for serious economic fraud and assesses and refers these
matters as appropriate to the Australian Federal Police," a
spokesman for Sen. Cash's office told the Journal.
"Integrity measures also provide for referrals to law
enforcement authorities in source countries for background checks
on applicants that have been identified as suspicious," the
spokesman said.
A spokesman for the Federal Police, Australia's FBI equivalent,
said operation 'Fox Hunt' was a strictly Chinese operation, but
said agents were cooperating with Chinese authorities "in assisting
to trace and restrain illicit assets in Australia on behalf of
Chinese authorities."
"The AFP has previously successfully restrained and confiscated
proceeds of crime from Chinese economic fugitives," the spokesman
said, adding that Australian authorities were working with Chinese
Ministry of Public Security officials to better combat money
laundering and economic fugitives.
Australia's Trade and Investment Minister Andrew Robb told The
Australian newspaper this month that the visa changes should force
holders to direct money into riskier national investment priorities
like new medical or agriculture startups and infrastructure
projects, rather than just parking it into safe government bonds or
managed funds.
"We feel this SIV and PIV could make a very material
contribution in terms of lowering costs and getting ventures off
the ground," he told the paper.
Ms. Cash's office said applicants for the visas would go through
rigorous integrity assessment using information from various
"external sources." That could include tax-sharing information,
with China part of a new international taxation alliance with
Australia and several other Western nations.
Also, the government's trade and investment promotion agency
Austrade would have oversight of potential investments and, in the
case of the new premium visa class, would have to nominate
applicants, adding another assurance of legality.
"SIV applicants must provide evidence that their funds have been
lawfully acquired and owned, and are not proceeds of crime," Sen.
Cash's spokesman said.
Write to Rob Taylor at rob.taylor@wsj.com
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