Governments are failing to look closely enough at notaries, registrars and real estate agents in efforts to root out criminals who launder money through property purchases, a global anti-money laundering agency said in a report issued Thursday. The Financial Action Task Force, a Paris-based organization that issues recommendations on combating money laundering and terrorist financing, called notaries and registrars "the weakest link" in efforts to limit real estate laundering, in part, because some jurisdictions have yet to enforce AML requirements for those professionals. What's more, even when the individuals file reports on suspected criminals, launderers go undetected because some jurisdictions...
The real estate sector's vulnerabilities to money laundering and corruption extend beyond simple schemes to use illicit funds when purchasing property. In many cases, the third parties involved in such deals pose risks too.
The new law extends anti-money laundering program requirements to industries including real estate companies, company formation agents and consumer credit businesses. They also set guidelines for determining beneficial ownership of various entities.
Many believe a surge in suspicious activity reports filed for suspected mortgage fraud - and the findings of two 2006 FinCEN reports detailing rising fraud and money laundering in mortgage lending and real estate - could force the agency to begin regulating those businesses as early as this year.