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Real Estate Sector

RE is an established method of money laundering internationally; the FATF has recognized that the real estate sector is a high-risk sector for money laundering, and it frequently attracts criminals who want to launder their dirty money. It is important to understand the potential risk of money laundering which may be higher depending on the geographical location of the customer as well as the location of the customer funds . As for the RE, holding payments in escrow for clients significantly increases the risk. Banks are unable to monitor the risk as they are not aware and have no information regarding the buyers from which the funds have been remitted.

Vast amounts of illicit capital are generated by criminal conduct. Increasingly, criminals’ need to integrate the proceeds of illicit capital into their personal lifestyles and business operations. Property purchases are one of the most frequently identified methods of laundering money as property can be used either as a vehicle for laundering money or as a means of cleaning illicit funds.

Criminals buy property both for their own use as principal residences or investment vehicles; providing legitimate income to mask the proceeds of crime(s).

Red Flags Examples 

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