Real estate agents are at risk of being exploited by criminals to launder money. They’re among several professions whose members may be affected by changes to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.
To help real estate agents understand the risks they face, the Department of Internal Affairs has just released a sector risk assessment (external link) (SRA) on its website.
On this page:
If you’re a registered real estate agent, you may need to put AML/CFT measures in place .
This will help prevent money laundering, make it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime and terrorism.
Here’s a summary of the proposed changes.
You’ll need to comply with the Act if you:
If you provide any of the services outlined above, you’ll have to comply from 1 January 2019.
To get ready, you’ll need to take a number of steps beforehand. For more information, see “What do I have to do to comply with the AML/CFT Act?”
Criminals often use real estate to convert the money they make from illegal activities into legitimate assets.
Introducing AML/CFT measures will deter criminals from using your services and help detect them if they do.
Importantly, it will also strengthen the overall AML/CFT system. For example, a real estate agent may detect ‘red flags’ that might not be picked up by banks or other financial service providers who interact with the same customers. That’s because you may have more information about the people or funds involved in a particular transaction.
The greater the AML/CFT risks your business faces, the more you’ll have to do to manage these risks. A small firm with long-term local clients may have fewer risks than a large firm with clients around the world.
Initially, you’ll have to:
On an ongoing basis, you’ll have to:
For information about ways to reduce compliance costs, see: Working with others to reduce your AML/CFT compliance costs
The Department of Internal Affairs (DIA) will supervise real estate agents, as well as other businesses that Phase 2 of the Act applies to. DIA will help you comply with the law and enforce it when needed. Some of the things DIA will do include:
A range of existing guidance material is already available to help get you started. Now the Bill has been passed, we plan to engage with sectors to develop regulations, which will provide more clarity, and produce more guidance material. For more information, see: AML/CFT supervision and support for businesses
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