Estate agents are considered vulnerable to financial crime as criminals may use property sales and rentals as vehicles to hide the source, dispose or use illicit proceeds or fund terrorist activities.
Investment in property provides a stable, high-value and secure asset, and is therefore a popular investment choice for both law-abiding citizens and criminals. The property sector can help mitigate the risk of criminal abuse by fulfilling their Financial Intelligence Centre Act (FIC Act) obligations which includes registering with the Financial Intelligence Centre (FIC) as accountable institutions.
Listed as accountable institutions under Schedule 1 of the FIC Act, estate agents must meet regulatory requirements such as reporting suspicious and unusual transactions and activities to the FIC.
Before meeting their reporting obligations, estate agents must first gain a thorough understanding of the money laundering, terrorist financing and proliferation financing (ML, TF and PF) risk factors relating to their client type, delivery channels, geographic areas of operation, products and services.
A key FIC Act compliance requirement is the development, implementation, and maintenance of a risk management and compliance programme (RMCP). The RMCP enables estate agents to identify, assess, mitigate, and manage the ML, TF and PF risks linked to property transactions. The FIC Act requires estate agents to adopt a risk-based approach, informed by a documented risk assessment as the foundation of the RMCP. Take note of sector risk assessments and Guidance Note 7A in this regard.
Estate agents must consider inherent risks, test the effectiveness of existing controls, and determine residual risk. Where higher risks are identified, enhanced mitigation measures must be applied. Risk assessments must be kept current and reviewed whenever material changes occur, such as shifts in ownership, client base, transaction patterns, or the operating environment.
Based on the institutional or entity wide risk assessment, estate agents must establish an RMCP that sets out policies, procedures, and controls to manage identified risks.
The FIC recommends that estate agents and all accountable institutions document their RMCP in a consolidated document to include the following FIC Act obligations:
RMCP governance and approval of the RMCP
ML, TF and PF risks assessment and risk-rating framework
Customer due diligence controls
Targeted financial sanctions controls aimed at combating terrorist financing
Targeted financial sanctions controls aimed at combating proliferation financing (sections 26A, 26B and 26C of the FIC Act)
Controls related to politically exposed person (foreign PEPs), and Prominent Influential Persons (PIPs)
Account monitoring
Reporting controls
Record-keeping controls.
Beneficial ownership identification and verification
In describing the controls in their RMCP, estate agents should explain processes for how their institution will be operating their anti-money laundering regime. The RMCP should be drafted and implemented based on the risks encountered specifically by the individual institution. The document must be updated on an ongoing basis.
Where an estate agency forms part of a group, a separate entity risk assessments must be conducted to reflect the ML, TF and PF risks specific to that branch or entity.
The RMCP must be approved by senior management or the principal and must be effectively implemented in practice.
Estate agents are required to upload their RMCP to the FIC’s registration and reporting platform, ensuring it accurately reflects their current risk profile and operations. Updates following reviews or new risk assessments must be submitted promptly. Failure to develop, implement, maintain, or upload an RMCP constitutes non-compliance and may result in administrative sanctions.
Detailed Guidance can be found on the FIC website by accessing the link below:-
