Real estate sector becoming a hideout for money launderers

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  • GREDA, GIABA, gov’t work towards solution

It is becoming increasingly attractive for money launderers to channel their resources to the real estate sector due to lack of regulations and ineffective supervision and monitoring, moving stakeholders and government to deliberate on policies to address the issue.

According to the Financial Action Task Force (FATF), the real estate sector accounted for up to 30 percent of criminal assets confiscated worldwide between 2011 and 2013. Ghana’s real estate sector has also been touted as very susceptible to money laundering due to factors such as lack of regulations and ineffective supervision and monitoring of industry players, weak due diligence on clients, and lack of critical inquiry into the source of funds before transactions are executed.

Other factors also include the cash intensive nature of business, operators’ ability to invest large cash and manipulate allied services and schemes, such as mortgages, and the establishment of nominees in situations where anonymity is required.

In a workshop organised by the Ghana Real Estate Development Association (GREDA), together with the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), Director General of GIABA, Aba Kimelabalou, speaking on theme ‘Enhancing anti-money laundering and combating the financing of terrorism compliance by real estate agents in Accra’, said his outfit has taken some steps to raise awareness about money laundering issues in the industry which will foster the implementation of Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

“The real estate sector is one of the main drivers of economic growth and the engine of social stability across member States, and thus constitute an important part of economic development within the region. Nonetheless, outcomes of typologies studies by GIABA and FATF, show that the real estate is one of the sectors vulnerable to money laundering and terrorist financing.

To support reporting institutions, including the real estate agents effectively implement AML/CFT preventive measures, GIABA has published some typologies reports, including the Typologies of Money Laundering Through the Real Estate Sector in West Africa and provided technical support/capacity building, guidance and best practices, and is currently supporting the regional association of Chief Compliance Officers to enhance engagement and coordination and foster implementation of AML/CFT regime in the region,” he said.

The Minister of State, Ministry of Works and Housing, Dr. Freda Akosua Prempeh, decried how the situation is causing revenue loss to the state and further discouraging legitimate investments in the economy, thereby, calling for industry players and government to collaborate to find a lasting solution to the problem.

“A well-coordinated effort amongst stakeholders would be required to address this menace, particularly, in view of the advancement in technology and our borderless world which is making it increasingly difficult to follow the financial trail that criminals leave behind. It is therefore imperative that we harness the expertise and information at our disposal to collectively fight this menace. There is the need for us to collaborate to serve as gatekeepers to identify and keep records of beneficial owners of legal entities, trusts and other legal arrangements in real estate transactions,” she said.

She further stated that the full implementation of the Rent Act together with the digitisation of the Rent Control Department would help track the operations of both landlords and tenants within the real estate market; adding that government is committed to any form of effort aimed at strengthening and deepening the capacity of individuals and institutions in the fight against all forms of financial crimes.

Apology

On April 1, 2021, we, the Business and Financial Times (B&FT) inadvertently used an image that belongs to Adom Group in a story titled Real estate becoming a hideout for money launderers on our news portal, www.thebftonline.com.

We unreservedly apologise to Adom Group for the error in judgement and the necessary steps have been taken to remove the image from the story and from our files.

Do accept this apology.

Thank you.

SOURCEBy Obed Attah YEBOAH
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