Real Estate Board Clamps Down On Dealers Non-Compliant With Anti-Money Laundering Survey

The Real Estate Board (REB) is clamping down on dealers who fail to complete the risk assessment survey, which is part of the entity’s anti-money laundering efforts.

Chief Executive Officer of the REB, Sandra Garrick, told JIS News that 13 real estate dealers’ licences were suspended earlier this month for failure to complete and submit the Board’s Anti-Money Laundering Risk Assessment Survey Questionnaire issued in 2020.

“The survey takes a risk-based approach by identifying factors in dealers’ operations or that of their clients which would put the dealer at a heightened risk for being used for money laundering or terrorism financing,” she noted.

These risks include, but are not limited to unnecessarily complex transactions or opaque beneficial ownership clients, transactions that are unusually large and complex and lack an obvious economic or lawful purpose, or transactions including politically exposed persons (PEPs) such as politicians or someone holding a prominent public position, she explained.

Emphasising the importance of dealers completing the survey, Mrs Garrick said that the research instrument helps the board in planning, and ascertaining data on the happenings and trends of the real estate industry.

“Failure to show sufficient and acceptable efforts to curb money laundering via adequate reporting or due diligence mechanisms will have negative implications on the country’s reputation in the business/banking sector,” she pointed out.

Mrs Garrick noted that the local real estate sector has drawn increased scrutiny since February 2020, when Jamaica was among seven new countries placed on a ‘grey list’ by the Financial Action Task Force (FATF) for gaps in stemming the financing of terrorist groups or money laundering.

As a result, the Government agreed to take the necessary corrective measures to address these deficiencies within a given time frame.

She noted that Section 38 of the Real Estate (Dealers and Developers) Act gives the Board’s Inspectors the power to require the holder of a licence issued, to supply in writing such information as relates to the applicant’s practise of real estate business.

“As of March 2021, a total of 98 per cent of dealers responded to the last survey and were, therefore, considered fully compliant. The remaining two per cent were considered non-compliant, ultimately resulting in their licence being suspended, and it is illegal to practise real estate in Jamaica without a valid licence issued by the REB,” she informed.

The REB is a designated competent authority under the Proceeds of Crime Act, covering non-financial businesses and professions that are identified as being vulnerable to money laundering or terrorist-financing activity

The Board is also required to contribute to Jamaica’s National Risk Assessment (NRA) with respect to remedial action taken in the real estate sector. The NRA is an established mechanism to identify the vulnerabilities and threats to the country’s anti-money laundering (AML) and counterfinancing of terrorism (CFT) regime to inform policy measures to address these areas.

Meanwhile, Mrs Garrick told JIS News that as of August 30, dealers participated in the first of a series of training workshops by the REB to address issues uncovered in the evaluation of the survey, as well as provide an update on general AML reporting requirements and guidelines.