Real Estate Professionals FAQs
Real estate is often used to clean illicit funds because it allows for high-value transactions, ownership layering, and anonymity—especially through companies or proxies. That’s why many countries now require real estate agents, brokers, and developers to follow AML regulations, conduct KYC, and screen for sanctions risk.
Responsibility typically falls on:
- Real estate agents and property brokers
- Developers involved in off-plan sales
- Legal advisors facilitating property transfers
- Accountants managing property trusts or payments
Even if you’re not a bank, you’re likely a “reporting entity” if you’re handling or facilitating property transactions.
Before completing a sale or rental, professionals must:
- Verify the identity of the buyer, seller, or tenant
- Identify the ultimate beneficial owner if a company or trust is involved
- Understand the source of funds used in the transaction
- Collect contact details and proof of address for documentation
For high-value deals or cross-border clients, Enhanced Due Diligence (EDD) may be required.
It means you don’t treat every client the same. You assess:
- Whether the buyer is local or foreign
- The complexity of the deal (e.g. shell company involved?)
- Whether the property is in a high-risk zone (e.g. freeports or economic hubs)
- If the client is a politically exposed person (PEP)
High-risk transactions should undergo stricter checks, ongoing monitoring, and possibly STR filing
Property can be a vehicle for sanctioned individuals to park value or hide assets. Screening your clients against sanctions and PEP lists helps prevent regulatory violations and protects your reputation. Even a single sanctioned buyer could trigger fines or government investigations.
Watch for:
- Purchases made in cash or crypto without clear source of funds
- Clients who refuse to provide full documentation
- Sales structured through complex ownership layers
- Pressure to close quickly without standard checks
- Buyers who are not physically present and operate via proxies
Any of these may indicate attempts to obscure the real origin or ownership of the funds.
It depends on local law, but in many jurisdictions, long-term or high-value rental agreements—especially those involving foreigners or commercial properties—are also subject to compliance requirements. KYC and screening may still apply to prevent misuse of rentals for illicit purposes.
They can:
- Use affordable tools like Anqa to handle KYC and screening
- Maintain simple client intake forms with built-in risk flags
- Rely on automated watchlist screening to stay updated on sanctions
- Set internal policies and templates—even if they’re basic—to demonstrate compliance
Being small doesn’t exempt you from regulation, but you can scale your approach to your size.