Last month features the release of the revised AML/CTF FATF Guidance for the real estate sector. The update, which was first agreed in June 2021, addresses the required risk-based approach for the sector, given how appealing the sector is to the criminal fraternity.
Further, data gathered by FATF during its 4th round of MER’s suggest the revamp is required, to adequately address money laundering (ML) and terrorist financing (TF) risks. Notably, a high portion of countries assessed during the MERs identified the real estate sector as presenting a high risk for ML/TF, with 37% of countries surveyed found the sector risk to be high, and with only 9% which consider it low or medium-low.
Equally concerning is that, in addition to the above, countries’ real estate sectors have been found to have a poor level of understanding of the relevant ML/TF risks. FATF reports that as of 2021, 78% of 4th round MERs suggest that there is a poor or very poor rating in this area, despite 47% of these countries acknowledging that the sector was heavily important to their economy.
The combined assessment of the FATF findings strongly suggest the need to revisit and refine practices and work towards improving overall compliance with FATF Standards. Correct implementation of the guidance should enable countries and practitioners to ably respond to the inherently unique ML/TF risks and threats they have identified.
With the UK’s Economic Crime Act recently introducing the register of overseas entities holding UK property, there is certainly a domestic and international spotlight shining on the real estate market as a whole.
A link to the full guidance is here: https://www.fatf-gafi.org/media/fatf/documents/recommendations/RBA-Real-Estate-Sector.pdf
For all those working within the real estate sector, the pressure is mounting, and whether you would benefit from a remote financial crime support service or think that now would be the perfect time to consider reviewing and updating your risk framework, policies, procedures, and employee training. Why not get in touch with Complyport today to see how we can help you?
Anti-Financial Crime Support – How can Complyport Help?
Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:
- Financial crime health checks and audits,
- Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
- Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
- Authoring/reviewing financial crime policies,
- Outsourced MLRO support
- Outsourced KYC and CDD support,
- Assistance in identifying Politically Exposed Persons (PEPs),
- Assistance in navigating international sanctions,
- Support with preventing market abuse and insider dealing,
- Expert Witness in Financial Crime cases
- Forensics and Investigations
- Design and/or delivery of online or face to face financial crime training
If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via martin.schofield@complyport.co.uk or Jan Hagen via jan.hagen@complyport.co.uk to book in a free consultation.
About Complyport
Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
Complyport advises and assists firms to become authorised and to comply with the rules and requirements of regulators on an ongoing basis. Our vision is to be there for our clients every step of the way, helping them change, grow, and excel through expertise, insight, and innovation, and in so doing to become our clients’ most valued supplier and trusted advisor.
We have successfully assisted over 1000 firms to become authorised with the FCA and EU and are providing regulatory support to over 600 regulated firms on an ongoing basis globally. With presence in the UK and EU, as well as via our Associates Network, Complyport can assist firms across multiple jurisdictions.
Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.
Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Our clients tell us we live our values; we are driven, agile and collaborative.
