What does, buying real estate have to do with money laundering? The Jamaican government fears that the two are becoming increasingly linked. The premise is that criminals world-wide tend to purchase properties — buildings/townhouses/apartments — in order to launder the proceeds of their criminal activities. The Real Estate Board (REB) recently “enlisted” the entire brigade of registered agents and brokers to help fight the rinsing of money from criminals. In a series of seven workshops, the REB contracted Shirley Ann Eaton, an Attorney-at-law and former Executive Director of the Jamaica Bankers Association to explain to the agents the implication of the law (The Proceeds of Crime Act 2007) for real estate transactions.
The regulations require agents to request valid identification from all purchasers with whom they do business. Agents must verify the source of the purchaser’s funds and his/her ability to finance the deal. Agents are not allowed to accept cash in excess of one million Jamaican dollars and in some instances we are required to report to the authorities, suspicious transactions.
In practical terms, most of the precautions that we are asked to look out for in our transactions relate to “cash” sales/purchase. These are transactions that the buyer will finance the payment from his/her funds without borrowing from a financial institution, that is, in cases where no mortgage is involved. The practice however is that if a purchase is being financed by a mortgage from a financial institution that institution will enquire of the purchaser’s wherewithal. In almost all sales transaction, the buyer’s lawyer collects the deposits, not agents, therefore agents have no need to be counting cash and writing receipts. If a purchaser is not using a lawyer in a cash sale, then the agent would have to be the one to collect the deposit. Even so, why would an agent not send the buyer to the bank to deposit the sum into an account and receive a manager’s cheque?
Agents should find little need to alter their current practices if they already have in place proper administrative and accounting procedures. The burden of verification still lies with financial institutions and lawyers. Purchasers and sellers are wise to use a lawyer for all transactions and avoid handling large sums of cash. Discuss with your banker, appropriate instruments of conducting your transactions. By so doing you have nothing to fear nor hide.