GIABA Identifies Real Estate Sector As Vulnerable Channel For Money Laundering

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The real estate sector has been identified by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) as a channel used by criminals to launder money.
A national workshop was opened by GIABA on Monday, 29th March 2021 on enhancing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) to tackle real estate agents in Ghana.

In a statement released by GIABA secretariat says the workshop is focused at enhancing the capacity of participants on the relevant standards of Financial Action Task Force (FATF).
Below is the full statement from GIABA Secretariat:
Honourable Minister of Works and Housing,
Chief Executive Officer of the FIC/GIABA NC in Ghana
President of Ghana Real Estate Developers Association
Ladies and Gentlemen,

It gives me great pleasure to make this Opening Remark on the occasion of the opening ceremony of the National Workshop on Enhancing AML/CFT Compliance by Real Estate Agents. I wish to express our sincere appreciation and to commend the national authorities of Ghana, especially the Chief Executive Officer of the FIC and his team for their inestimable support towards the organization of this programme.

I would also like to express profound gratitude to the President of the Ghana Real Estate Developers Association (GREDA) for graciously mobilizing the members of the Association to participate in this programme. To our Resource Persons, I would like to say thank you for accepting the invitation to facilitate at this programme.

2. Ladies and Gentlemen, the real estate sector is one of the main drivers of economic growth and the engine of social stability across member States, and thus constitute an important part of economic development within the region. Nonetheless, outcomes of typologies studies by GIABA and FATF, show that real estate is one of the sectors vulnerable to money laundering and terrorist financing. This finding is re-echoed by the National Risk Assessment of the Ghana which identified the real estate sector as the ever-growing and largest DNFBP, and one of the key sectors exposed to significant ML/TF risk in the country.

3. The 2nd round of Mutual Evaluation Report (MER) of Ghana highlighted critical vulnerabilities which expose the real estate sector to ML/TF risk. In particular, the MER noted the limited understanding of ML/TF risk and AML/CFT obligations, weak due diligence, the preponderant use of cash to finance real estate transactions, the unorganized nature of the sector, operators’ ability to invest large cash and manipulate allied services and schemes, and general poor regulations and ineffective supervision and monitoring of industry players, as some of the factors that make the real estate sector attractive for potential misuse by money launderers or terrorist financiers. Thus, as it stands today, the real estate sector, and indeed all DNFBPs constitute a weak link in the implementation of AML/CFT measures in the country. This has adverse implications not only on national AML/CFT regime, but regional efforts in combating money laundering and terrorist financing.

4. To support reporting institutions, including the real estate agents, effectively implement AML/CFT preventive measures, GIABA has published some typologies reports, including the Typologies of Money Laundering Through the Real Estate Sector in West Africa and provided technical support/capacity building, guidance and best practices, and is currently supporting the regional association of Chief Compliance Officers to enhance engagement and coordination and foster implementation of AML/CFT regime in the region.

5. Ladies and gentlemen, the primary objective of the programme is to provide supervisors, self-regulatory bodies and real estate professionals with requisite knowledge on the vulnerabilities, methods and/or channels used by criminals in the real estate sector to launder money. In Particular, the workshop is aimed at:

(a) enhancing the capacity of participants on the relevant FATF standards

(b) raising awareness of participants on current and emerging ML/TF risks; and

(c) promoting cooperation, coordination and engagement amongst and between relevant competent authorities and real sector professional on how to effectively implement AML/CFT preventive measures in Ghana. Overall, this is expected to further strengthen national AML/CFT efforts, and improve general compliance by Ghana with relevant FATF Recommendations and Immediate Outcomes.

6. To achieve the objectives of this programme, we have assembled well-experienced professionals to deliver this workshop. I am confident that the contributions of these experts and interventions of the participants will enrich the quality of deliberations. The topics have also been carefully put together to cover the broad spectrum of the issues to be discussed.

7. To you participants, I enjoin you to take full ownership of this programme and take advantage of it to make a difference in your various institutions. Having been carefully selected to attend this event, we expect the best from you and we are confident that the interactions and the attendant exchange of ideas during the workshop shall further deepen your knowledge, with positive manifestations at the operational level. It is our expectations that the interactions at this workshop will further enhance collaboration between you and the national authorities, in order to effectively respond to current and emerging threats of money laundering and terrorist financing in the country.

8. I wish you fruitful deliberations.

Thank you
GIABA Secretariat March 29, 2021