This was revealed by the Financial Intelligence Centre in their recent assessment of the inherent money-laundering and terrorist financing risks impacting the real estate sector report.
“Locally property transactions tend to come with a paper trail including banks, estate agencies and attorneys through conveyancing. This process often excludes estate agents from receiving the funds or registering the property themselves and this can also mean that some due diligence on the origin of funds falls by the wayside,” said George.
The overvaluing or undervaluing of property prices is another concern. Money laundering can effectively create distortions in property prices within a suburb or area because of criminals being willing to pay more than market value to quickly finalise a transaction. “An example is when a transaction doesn’t make sense, such as suspicion around the purchase price and the stated income or occupation of a client. Deposits paid by third parties or purchases made in the name of third parties should be screened.
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