Agents clamping down on money laundering practices

People out shopping for a new house or property will face more scrutiny from real estate agents from now on.

New Zealand introduced its Anti-Money Laundering and Countering Financing Terrorism legislation in 2009 and banks, financial institutions and many other sectors have been operating under the legislation since June 2013.

As from January 1 this year, real estate agents must also comply.

This means agents will need to verify the identity of purchasers who pay cash deposits of $10,000 or more. In some circumstances, such as if they represent a company or trust, they may also need to ask for information about where money came from and the other people involved.

According to the Ministry of Justice, criminals often use real estate to convert the money they make from illegal activities into legitimate assets.

The new Act is aimed at deterring criminals from using agents’ services and helping detect them if they do.

“Importantly, it will also strengthen the overall system,” a spokesperson says. “For example, a real estate agent may detect ‘red flags’ that might not be picked up by banks or other financial service providers who interact with the same customers. That’s because agents may have more information about the people or funds involved in a particular transaction.”


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