The Real Estate Business: A Real Delight for Money Launderers

The Real Estate Business: A Real Delight for Money Launderers

AML-TRACE helps you achieve regulatory compliance cost-effectively. It adopts an enterprise-wide approach to manage your KYC/EDD/CDD requirements right from initial onboarding till the culmination of the client’s dealing with the business. Your real estate business is in good hands with AML-TRACE: the best anti-money laundering solution for real estate.

As real estate prices can get high, criminals get a cover to legitimize significant amounts of illegally-earned money in a single transaction. Besides, even if properties are bought at a higher rate than the market price, it does not raise any suspicion among the concerned authorities.  

But this is not the only argument for the need for AML software for real estate agents.

Other Reasons Of Money Laundering in Real Estate

  • Lucrative Investment Opportunity

As properties can be rented out or sold for a higher price in the future, real estate is considered a stable investment.

  • Limited Scrutiny

Non-financial sectors like real estate & art are subject to weak regulatory oversight compared to financial institutions like banks.

This brings us to the question, 

How can real estate businesses achieve regulatory compliance?

  • Customer Verification

Real estate businesses need to conduct KYC checks on their clients. The use of anonymous companies & third parties are rampant in the real estate industry. In such a scenario, an AML software for real estate agents saves their day. Here are some other steps you can take:

  • Check Beneficiaries

If the buyer is a company, you must check its Ultimate Beneficial Ownership. Most criminals use shell firms to keep their names secret. As a real estate agent, you can request that the company submit its UBO information to identify beneficiaries.

  • Screen for Politically Exposed Persons

Several corrupt officials prefer to launder money through real estate. So, you should check all of their clients against domestic and international PEP registries. Further, also perform adverse media checks as anti-money laundering in real estate.

  • Verify the Origins of Client Funds

If a client happens to be a PEP, check their sources of funds. Request them to submit their bank statements & asset declarations. Ensure that this information matches the actual amount that the customer offers to pay.

  • Perform Sanctions Screening

For this, use the Office of Foreign Assets Control’s sanctions lists and Financial Action Task Force’s blocklists. Performing sanctions screening is imperative because many sanctioned oligarchs & politicians try to launder money abroad.

But you do not need to build the whole KYC process from scratch. AML-TRACE has an in-built customer KYC mechanism that efficiently verifies many customer details within minutes.

Which are the real estate money laundering red flags?

  1. Buyers located in a country with a weak AML regime or high corruption.
  2. Unexplained geographic distance between the buyer & the property.
  3. Under or overpriced property value.

AML-TRACE is an anti-money laundering solution for real estate businesses that adopts a risk-based approach & gives you access to all customer records to conduct regular audits. It can be deployed in-site and on-cloud. Talk to us now!