Real Estate Industry
WHY WILL REAL ESTATE HAVE AML/CTF OBLIGATIONS?
WHAT SERVICES ARE COVERED BY AML/CTF OBLIGATIONS?
WHAT ARE THE ML/TF RISKS FACED BY THE REAL ESTATE INDUSTRY?
WHAT IS A RISK-BASED AML/CTF REGIME?
HOW CAN CUSTOS ADVISORY HELP?
The AML/CTF regime is risk-based, which means that your responses to the AML/CTF obligations placed upon you should be risk-based.
A risk-based AML/CTF regime requires that you understand and address the Money Laundering and Terrorism Financing (ML/TF) risks associated with the services you offer.
You must then design, implement and maintain systems, procedures and controls that are proportionate to your ML/TF risks.
With over 50 years of expert knowledge and real world experience our AML/CTF compliance solutions will to help you navigate your legal and regulatory requirements so that your business complies with its AML/CTF obligations in the fastest and most cost-effective way.
Costos has a range of AML/CTF solutions to support your business in becoming AML/CTF compliant and maintaining compliance.
Real estate can be an attractive channel for criminals wishing to launder illicit funds.
Criminals can purchase a property using illicit funds, live in the property purchased with illicit funds, renovate the property (using illicit funds) to improve its value and sell the property later for a capital gain.
The ultimate beneficial ownership of real estate can also be easily concealed, making it an attractive asset class for criminals.
The Money Laundering and Terrorist Financing (ML/TF) risks associated with the real estate sector include:
The use of third parties to buy and sell properties
The use of loans and mortgages (for example, criminals take out a mortgage to buy a property and pay back the mortgage using lump sum cash payments)Manipulating property values (that is, criminals buy and sell real estate at a price above or below market value)
Structuring cash deposits to buy real estate
The use of complex company structures and multiple accounts to disguise the real purpose of a property transaction and disguise its’ true ownership
Buying and leasing properties, but providing the tenant with illicit funds to pay the rents
Buying a property using illicit funds with the intention of conducting further criminal activity at the property
Using illicit funds to renovate properties
Businesses within the real estate industry captured by the AML/CTF obligations must ensure their organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures. This is a critical first step in complying with the AML/CTF Act and Rules.
These are the services offered by the real estate industry that may be included as designated services under the AML/CTF Act.
Managing client funds (other than sums paid as fees for professional services), accounts, securities, or other assets
Engaging in or giving instructions on behalf of a customer to another person for any conveyancing to affect the grant, sale, or purchase or any other disposal or acquisition of real estate or an interest in land
The transfer of a beneficial interest in land or other real property
If you offer or provide one or more of the above services, your business will be subject to AML/CTF obligations.