KYC & AML Compliance for real estate agents

Real estate agents must take the necessary steps to ensure that they are protected and compliant with KYC and AML compliance regulations. KYCAID helps to onboard legitimate customers, strengthen ongoing monitoring and secure your business from hefty fines.
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Protect your business from money laundering

KYC compliance is an obligatory point for companies and businesses of any industry to minimize financial risks and other frauds for enterprises and their clients. KYC or Know Your Client verification is the best-approved system that checks the identity of the person's identity who tries to perform any financial transaction.

KYC compliance is based on critical aspects such as verification that goes before specific actions; facilitating clients' loyalty which means you worry about their security and data protection; confirmation to prove your identity to prevent financial fraud.

KYC identity verification is an effective tool for businesses and estate agents' anti-money laundering to check who their clients are, what funds and documents go through their inner financial flows and their origin, credit card validation, etc. That guarantees the company's reputation and raises the trust of business partners and customers.

KYC refers closely to AML rules, which is an Anti-Money Laundering policy, to mitigate the risks of terrorism financing and money laundering. This approach prevents obtaining money illegally, putting "dirty" money into the legitimate financial system, and its further withdrawal for illicit purposes. KYC is a component of the AML policy that enhances compliance performance.

When dealing with the real estate market, obviously it's unpredictable and risky, its values tend to grow over time and your investment can even depreciate. Lots of factors and events can influence the trends of real estate. But, if you follow proper steps such as due diligence, research of the industry, monitoring your assets, etc, it'll help you not to be caught with great losses.

Protect your business from money laundering
Real Estate as a target for fraudsters

The real estate industry is a target for money launderers since buying & selling property enhances the flow of dirty money. Buying property via complex illicit systems of foreign companies facilitates money laundering. Also, this area deals with large financial transactions that hide information about the owners and their sources of income. Some transactions may involve third parties of doubtful reputation.

A real estate agent should follow the specific compliance requirements, as KYC for estate agents, "know your buyer" and "ultimate beneficial owner" due diligence. Although, the sector of real estate is vulnerable to money laundering & terrorism financing because of compliance gaps, as follows: an opportunity to buy real estate using cash, and a lack of transaction transparency.

Сompliance program of anti-money laundering for estate agents that includes:
Assessment of possible risks considering clients' reputation, their relationships, available property, previously executed deals, operating country, and unusual transactions.
Prepare risk-lowering measures and be ready to control them constantly.
Monitor business relationships and transactions.
Perform CDD (Customer Due Diligence) when establishing new business contacts.

Regular checks
by estate agents

Enormous amounts of funds can be cleaned by criminals just in one transaction. That's why it's crucial for real estate agents to check the entire financial operations and report any suspicious activity.

Did you want to clarify the fact that estate agents need proof of funds and ownership when purchasing accommodation? Let's determine what anti-money laundering checks for estate agents are necessary to prevent illegal malicious financial operations and quit money laundering and terrorism financing:

Proof of ownership Proof of ownership
A real estate agent can get it by viewing the title deeds that have all the needed data about the owner and their recent utility bills.
Proof of funds Proof of funds
When buying accommodation, a client should prove that the money to purchase the property came legally. An estate agent should provide information about the sources of those funds.
Proof of identity Proof of identity
Getting official documents, i.e. ID, to prove the personality of a client. That can be a passport or driving license and also provide a current address.

Responsible Authorities in the USA

Responsible Authorities in the USA

Responsible Authorities in the USA

The US Department of the Treasury is fully responsible to fight all aspects of money laundering in the US and abroad via the representation of the Office of Terrorism and Financial Intelligence (TFI). The Department's duties include combating criminals' financial transactions who are trying to conceal their illicit activity. Since money laundering threatens the integrity of the financial system, the TFI can use the Department's assets, i.e. legal authorities, financial checks, operational resources, connection with the private sector, and internal and interagency communities to detect and mitigate money laundering operations across the whole financial system.

Considering the urgency of the issue, estate agents have to adhere to the money laundering checks when selling a house set by the above-mentioned organizations and policies of the local authorities to undertake severe measures to reduce risks. Moreover, financial institutions are subject to AML & counter-terrorism financing rules, such as the BSA (Bank Secrecy Act), a reporting act that detects and prevents money laundering. It involves tracking all the financial operations with reporting suspicious activity connected to tax evasion, money laundering, and other scam manipulations.

Indeed, real estate agents and brokers can help to lower the cases of money laundering while buying/selling. However, they should know key measures that regulate this area and know how to detect AML red flags to mitigate financial fraud. If any illicit activity was defined, an agent has to inform the corresponding entities to apply proper AML checks for estate agents.

Possible Risks
Real estate agents can facilitate the performance of title insurance companies in maintaining their compliance with GTO requirements. Thus, estate and letting agents have to know these major risk factors when detecting any financial fraud activity:
Geographical risks
...mean a buyer/seller or their funds can be located in a territory with poor AML regulations. That's why they may pose an AML risk.
Customer risk
...includes the location of a buyer and their property, suspicious involvement of third parties, or high-ranking foreign political officials.
Transaction risks
...such as big amounts of cash, over- or undervalued property selling/buying, immediate property resale, and unusual sources of income.
Making KYC work for you

Making KYC work for you

Estate agents should cooperate with law enforcement agencies to accelerate and simplify detecting illegal financial operations that break AML regulations and break the existing anti-money laundering measures in the particular territory.

So, cover the needs of your real estate business by following all compliance demands of KYC & AML standards due to the all-inclusive help of the KYCAID platform. Ensure your partners and clients with your venture reliability, risk absence, and simple interaction.

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