KYC & AML Compliance for real estate agents
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.
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.
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:
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.
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.