Real estate sector still lagging on anti-money laundering compliance
Published:Sunday | June 11, 2023 | 12:08 AM
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The Real Estate Board of Jamaica, REB, says its still labouring to bring a number of licensees that, together, handle billions of dollars in sales annually, in line with laws that are meant to counter the flow of illicit money. From a risk...
The Real Estate Board of Jamaica, REB, says its still labouring to bring a number of licensees that, together, handle billions of dollars in sales annually, in line with laws that are meant to counter the flow of illicit money.
From a risk assessment survey conducted via questionnaire two years ago, there were 74 real estate licensees considered high-risk, and 222 medium-risk.
“Those found to be high-risk are subject to inspections three times a year, with those found to be medium-risk subject to annual inspections,” said the real estate regulator.
In 2021, some 13 dealers were suspended for not completing the money-laundering risk assessment. However, that number was eventually culled to seven, the REB said this week.
The other six had their licences reinstated after completing the required assessments.
Currently, there are 339 dealers and 1,562 real estate salespersons licensed by the Real Estate Board.
Salespersons are required to complete Continuing Professional Development courses. However, the agency said there are 191 active salespersons who have not completed the mandatory Terrorism Prevention Act course, while 136 have not completed the GoAML course.
Additionally, 52 of the licensed dealers have failed to register on the GoAML platform housed at the Financial Investigation Unit, as required by law.
This web-based reporting portal automates reports that dealers are required to submit as part of international anti-money laundering/counter financing of terrorism, or AML/CFT measures.
All licensed dealers are also required to file reports under the Terrorism Prevention Act and United Nations Securities Council Resolutions Implementation Act on the GoAML platform.
So far this year, there were 444 filings as of May.
Jamaica’s AML/CFT framework is covered by the Proceeds of Crime Act and the Terrorism Prevention Act.
Pressure on the real estate sector for compliance increased in 2021, when regulators clamped down on licensees in the sector.
At the time, the Bank of Jamaica, which has a primary role in monitoring foreign money flows, spearheaded coordinated efforts to bring local institutions and professionals into compliance with local laws and the global regime.
Hope Wint, the executive director of the Prime Contact Secretariat, Jamaica’s point organisation for AML/CFT matters, also reported then that in 2019, the level of business handled by 286 real estate developers amounted to $47 billion, “the equivalent of about three per cent of GDP”.
For the wider construction sector, the most recent data published by Statin estimated the cumulative economic value of construction activity at $188 billion in 2022.
The REB is the competent authority for the real estate industry, under the Real Estate Dealers and Developers Act, but the central bank has been maintaining watch on land development activity, which is considered to hold significant AML/CFT risks.