Revised recommendations from FATF for real estate agents
April 30, 2012
The Financial Action Task Force (FATF)
, the intergovernmental body that develops and promotes national and international policies to combat money laundering, financing of terrorism and proliferation of weapons of mass destruction, issued revised recommendations in February following review and input from member countries and private sector industry groups. ICREA represents the real estate sector to the FATF through the Private Sector Consultative Forum, and has advocated for the interests of real estate agents while supporting the Task Force’s overall objectives.
ICREA’s current interests are associated with issues of clarity arising from the revised recommendations that pertain to the Risk-Based Approach (RBA), customer due diligence measures, and the transparency of ownership. While there has been progress made to provide more clarity in some areas, other areas remain a concern, including a more clear definition of a real estate agent’s “involvement” in a transaction. ICREA is committed to finding a satisfactory solution to mitigate potential onerous consequences governments may wish to promote in response to the FATF recommendations.
Going forward, there are two processes of interest to ICREA. First is the production of a Risk Based Approach Guidance specific to the real estate sector which will be used by governments when considering/implementing regulations or legislation. This same Guidance can also be used by ICREA member associations as a negotiation basis with their respective local governments to argue against undesired regulation/legislation. Secondly, a new round of Mutual Evaluations will begin in 2013, which is a review of the Recommendations, their effectiveness, how they are implemented and what problems occur. It is possible that the Recommendations will change again on the basis of this Mutual Evaluation, and so will then the RBA Guidance for Real Estate Agents. Therefore, it is critical that ICREA remain involved to monitor these processes.
Member associations may contact ICREA for assistance in responding to government proposed regulation in response to FATF.