• Real Estate - Commercial

    Some services provided by the commercial real estate sector are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Real Estate – Commercial

What are the ML/TF Risks?

Real estate can be an attractive channel for criminals wishing to launder illicit funds for a number of reasons.

Criminals can purchase a property using illicit funds.

The ultimate beneficial ownership of real estate can also be easily concealed.

The Money Laundering and Terrorist Financing (ML/TF) risks associated with real estate include:

  • The use of third parties to buy and sell properties;
  • Manipulating property values (that is, criminals buy and sell real estate at a price above or below market value);
  • The use of complex company structures and multiple accounts to disguise the real purpose of a property transaction and disguise its true ownership; and
  • Buying and leasing properties, but providing the tenant with illicit funds to pay the rents.

The commercial real estate businesses must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for the commercial real estate industry.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, a AML/CFT Program, CDD Standards, and a AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

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