FATF Guidance on the RBA for Real Estate Agents
This Guidance on the Risk-Based Approach to combating Money Laundering and Terrorist Financing was developed by the FATF in close consultation with representatives of the real estate industry. The Guidance supports the development of a common understanding of what the risk-based approach involves, outlines the high-level principles involved in applying the risk-based approach, and indicates good public and private sector practice in the design and implementation of an effective risk-based approach.
The purpose of this Guidance is to:
However, it should be noted that applying a risk-based approach is not mandatory. Countries will need to make their own determinations on whether to apply a risk-based approach, based on their specific ML/FT risks, size and nature of the designated non-financial businesses and professions (DNFBPs) activities, and other relevant information. The issue of timing is also relevant for countries that may have applied anti-money laundering and combating the financing of terrorism (AML/CFT) measures to DNFBPs, but where it is uncertain whether the DNFBPs have sufficient experience to implement and apply an effective risk-based approach.
This guidance is presented in a way that is focused and relevant for real estate agents when they act for buyers or sellers. The roles and therefore risks of the different DNFBP sectors are usually separate. However, in some business areas, there are inter-relationships between different DNFBP sectors, and between the DNFBPs and financial institutions. For example, real estate transactions often involve financial institution lenders, as well as lawyers or notaries, and real estate agents.
DNFBPs provide a range of services and activities that vastly differ, e.g. in their methods of delivery, and in the depth and duration of the relationships formed with customers. This guidance is written at a high level to cater for the differing practices of real estate agents in different countries, and the different levels and forms of supervision or monitoring that may apply. Each country and its national authorities should aim to establish a partnership with its real estate agents and other DNFBP sectors that will be mutually beneficial to combating money laundering and terrorist