Which risks inherent to real estate sector carry the highest AML/CFT risk? (Select Two.)

The correct answer is A. Use of cash to purchase property D. Use of a company for the purchase of property. Real estate ML/TF risk is highest where transparency is low or the origin of funds is obscured: Use of cash to purchase property (A):"All-cash transactions in real estate present a high ML risk, as they bypass traditional financial scrutiny and facilitate the placement of illicit

Risks and Methods of Money Laundering and Terrorist Financing

Question

Options

AUse of cash to purchase property
BUnlicensed real estate agents acting as front companies
CUse of a registered trust for the purchase of property
DUse of a company for the purchase of property
EManipulation of the value of a property

How the community answered

(28 responses)

A
75% (21)
B
4% (1)
C
7% (2)
E
14% (4)

Explanation

Real estate ML/TF risk is highest where transparency is low or the origin of funds is obscured: Use of cash to purchase property (A):"All-cash transactions in real estate present a high ML risk, as they bypass traditional financial scrutiny and facilitate the placement of illicit funds."(CAMS 6th Edition, Real Estate Money Laundering Risks) Use of a company for the purchase of property (D):"Purchasing property through companies, especially shell companies, can conceal the beneficial owner and the true source of funds."(CAMS 6th Edition, Real Estate ML/TF Risks; FATF, Real Estate Sector)

Topics

#real estate ML risks#cash purchases#shell company purchases#beneficial ownership

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