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By Swati Pandey
SYDNEY Aug 7 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At least 20 percent of applications are either withdrawn or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 &
"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."
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
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
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.
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
"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.
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.
"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
"You cannot run away from the question of your sources of
funds. The government will not budge from that stance."
($1 = 1.0748 Australian dollar)
(Editing by Lincoln Feast and Robert Birsel)