Lawyer Monthly Magazine - May 2019 Edition

in attractive markets such as Australia. Transparency International proposed a set of reforms and measures to establish an effective system to detect and prevent money laundering through real estate: Coverage of anti-money laundering provisions should be adequate. All entities involved in real estate transactions (e.g. real estate agents, lawyers, accountants and mortgage lenders) should be required by Governments to conduct due diligence on customers. Beneficial ownership identification should become the norm Governments should require that real estate agents and other entities engaging in property transactions keep records on the beneficial owners of customers before proceeding with the sale or purchase. Checks on foreign and domestic politically exposed persons (PEPs) should be enhanced Governments should require all reporting entities who engage in the buying and selling of real estate to identify whether a customer is a PEP, a family member or an associate of a PEP – and conduct enhanced due diligence. Foreign PEPs and their associates should be treated as high-risk clients. Foreign companies should only gain access to the real estate market upon providing information on their real owners Governments should require that companies provide beneficial ownership information which is available to law enforcement, and preferably also in a public registry. This information should include name, nationality, date of birth, address, and how control is exercised. Suspicious transaction report (STR) rules should be adequate and implemented Governments should require all parties involved in real estate transactions to report suspicious transactions to the financial intelligence unit, and these reports should be accessible by law enforcement agencies. Supervisory bodies should provide guidance on identifying ‘red flags’ and on effectively submitting STRs. Professionals who can engage in real estate transactions should be registered and submit to “fit and proper” tests All relevant parties should be required to register with a designated public authority and undergo anti-money laundering training. Money laundering risks in the sector should be understood and fully acted upon Both governments and reporting entities should conduct risk assessments and use the findings to improve enforcement and compliance, respectively. Supervision of the sector should be consistent and effective Governments shoulddetermine a single independent supervisory body to oversee reporting entities’ compliance with anti-money laundering legislation. Supervisory bodies and the country’s financial intelligence unit should be independent and should have powers to request information and conduct on-site checks. Sanctions in the sector should be effective and dissuasive Administrative and criminal sanctions should be enforced against individuals and companies to punish non- compliance with anti-money laundering legislation. What are some of the challenges faced when representing clients charged with international money laundering? Given what has been said already about the international nature of money laundering and the difficulties involved in detecting it, it is unsurprising that prosecutions for international money laundering are intelligence based and resource intensive. Often, they involve several law 1. AUSTRAC, 2010. AUSTRAC typologies and case studies report 2010 (Case 9). http://www.austrac.gov.au/sites/default/files/documents/typ_rpt.pdf 2. AUSTRAC, 2009. AUSTRAC typologies and case studies report 2009 (Case 28). http://www.austrac.gov.au/sites/default/files/documents/typ09_full_rpt.pdf 3. AUSTRAC, 2012. AUSTRAC typologies and case studies report 2012 (Case 9). http://www.austrac.gov.au/sites/default/files/documents/typ_rprt12_full.pdf 4. AUSTRAC, 2007. AUSTRAC typologies and case studies report 2007 (Case 39). http://www.austrac.gov.au/sites/default/files/documents/typologies_report.pdf 5. AUSTRAC, 2010. AUSTRAC typologies and case studies report 2010 (Case 1). http://www.austrac.gov.au/sites/default/files/documents/typ_rpt.pdf 6. FATF, 2018. Professional Money Laundering. http://www.fatf-gafi.org/media/fatf/documents/Professional-Money-Laundering.pdf 7. AUSTRAC, 2018. AUSTRAC’s approach to regulation. http://www.austrac.gov.au/sites/default/files/AUSTRAC_ApproachRegulation1811_v2WEB.pdf 8. Transparency International, 2017. Doors Wide Open – Corruption and Real Estate in Four Key Markets. https://knowledgehub.transparency.org/assets/uploads/kproducts/2017_DoorsWideOpen_EN.pdf 9. European Parliamentary Research Service, 2019. Understanding money laundering through real estate transactions. http://www.europarl.europa.eu/RegData/etudes/BRIE/2019/633154/EPRS_BRI (2019)633154_EN.pdf enforcement bodies working collaboratively to investigate and collect the necessary evidence across borders. The use of mutual legal assistance requests, the issuing of Interpol red notices and the freezing of assets are some of the procedures often found in these cases. It is also likely that a decision will need to be made about which jurisdiction will ultimately prosecute the offender, which in turn means that there could be a request for extradition. Individuals who are being investigated and prosecuted against this backdrop, therefore, face many legal and procedural challenges in many jurisdictions in a way that has never really been seen before in criminal law. It remains fundamental to international criminal justice that all of these processes comply with the rule of law and a suspect’s human rights, including the right to silence, bail, legal representation and a fair trial. LM MAY 2019 31 Expert Insight www. lawyer-monthly .com