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ECOWAS and GIABA engage real estate operators on money laundering

Workshop GIABA
Workshop GIABA

Dr Freda Akosua Prempeh, the Minister of State for Works and Housing, has called for a well-coordinated stakeholder engagement in the real estate sector to curtail activities of money launderers.

She said that was crucial given the advancement in technology and “our borderless world,” which was making it increasingly difficult to follow the financial trails of criminals.
The Minister said money laundering was a form of financial crime, which had become sophisticated and prominently manifested currently through the real estate market.

She said such criminals integrated illegally acquired funds into legal economies, to provide safe investments through the use of either direct cash to purchase properties or fictitious names to purchase properties, or the use of third parties and front men to purchase properties.

“In this regard, the real estate sector has become an easy and convenient place where financial criminals hide their millions of Ghana cedis or convertible currencies from the State, thereby depriving government the requisite revenue for developmental projects, and further discouraged investment in legitimate businesses, with the potential to undermine the rule of law and the foundation of democracy.

Dr Prempeh, was speaking at the opening of a three-day National Workshop on, “Enhancing Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Compliance by the Real Estate Agents and Practitioners,” in Accra on Monday.
It was organised by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), in conjunction with the Financial Intelligence Centre (FIC), Ghana.

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The workshop attracted participants from institutions including the Ghana Real Estate Developers Association (GREDA).

She urged all real estate industry players to serve as gatekeepers to identify and keep records of beneficial owners of legal entities, trusts, and other legal arrangements in real estate transactions.

According to her, there was enough statistics and empirical evidence to show how grave the situation was around the globe and cited the Financial Action Task Force ({FATF) report, which showed that the real estate sector accounted for up to 30 per cent of criminal assets confiscated worldwide between 2011 and 2013.

She said the Ministry of Works and Housing in its quest to adhere to international best practices as part of the promulgation of the Real Estate Agency Act, 2020 (1047), incorporated provisions to plug the avenues in which real estate transactions were used to launder money, which included the prohibition of the use of cash for real estate transactions.

It was to ensure detailed tracking of the transactions and those persons involved in the transactions, strengthen the anti-corruption initiatives in the country and curb money laundering and other financial malpractices in the sector, while the proposed Rent Act when completed, would make provision for a tenancy system which would compel landlords and owners to conduct proper checks on tenants before, renting out their properties.

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The Minister said it was envisaged that the full mentation of the new Rent Act together with the digitisation of the Rent Control Department would help track the operations of both landlords and tenants within the real estate market.

She said, however, it would be pointless if industry players had little knowledge and skills on the application of the critical tools to combat money laundering and other financial crimes.

Dr Buno E. Nduka, the President of GIABA, said real estate businesses were part of Designated Non-financial Businesses and Professions (DNFBPs), which had Money Laundering and Terrorist Financing (ML/TF) reporting obligations including identifying, assessing, monitoring, managing, and taking effective action to mitigate ML/TF risks.

He said using a risk-based approach that required enhanced measures when the risks were higher, carry out Customer Due Diligence (CDD) for the customer, beneficial ownership, and business relationship among other things were very appropriate.

It was also required to take additional measures and precautions for Politically Exposed Persons (PEPs), maintain records of CDD information and transactions, implement policies, procedures and internal controls against ML/TF risks, implement targeted financial sanctions and freeze assets or take action against persons and entities, as well as report, in good faith, suspicious transactions to the Financial Intelligence Unit.

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It will also promote cooperation, coordination, and engagement among relevant competent authorities and real sector professionals on how to effectively implement AML/CFT preventive measures in Ghana.

Mr Patrick Ebo Bamfo, the President of the Ghana Real Estate Developers Association (GREDA), thanked the organisers for the opportunity given to its members not only to participate in the workshop but to also contribute to knowledge sharing.

He said despite its readiness to assist with all national efforts to weed out criminal elements in the sector, GREDA had no legislative backing to compel its members to comply with any particular state policy.

Mr Bamfo called for government support for GREDA to ensure proper monitoring of activities of all sector players and also ensure compliance with regulations.

He appealed for financial and logistics support for the Association to put in place requisite Information and Technology infrastructure to track the activities of its members.

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