Keeping real estate clean

The purchase of property has the potential to be used by organised criminals to launder the proceeds of criminal activity. This is due to the significant amounts of criminal funds which can be "cleaned" in a single transaction. It is therefore critical that all professionals working in the sector are acutely aware of the issues and appropriately trained to identify and report any suspicions of money laundering.

The problem is increasing. Based on the PwC “Global Economic Crime and Fraud Survey 2018”, 54 pct of respondents involved in money movement (and/or any of the following lines of business: financial institutions, mutual funds, money service businesses, broker dealers, insurance companies, or dealers in precious metals, stones or jewels) indicated they had experienced an Anti-Money Laundering (AML) regulatory enforcement or inspection in the last two years (up by 4 percentage points from 2016). And an identical proportion (54 pct) expect recent changes in the geopolitical regulatory environment to have a greater impact on their organisations over the next two years.

The profession needs to work with governments, supervisors and law enforcement agencies to ensure our industry is viewed by criminals as a hostile destination for money laundering. As the profession’s regulatory, RICS takes robust action against those who fail to act with integrity, as well as reporting such issues to law enforcement agencies.

This is not only in the interest of the public, but also in the interest of professionals, who want to ensure that the reputation of their profession is maintained. Therefore, it is important that the profession takes a leading role in ensuring that business interactions with the built environment are transparent and serve the public good.

More and more regulations are being introduced by regulators every year. They affect not only FS-industry players, but also span across other sectors. As PwC we have been helping our clients combat financial crime and meeting regulatory demands by delivering both advisory and operational support service.