Real estate agents advised to ramp up AML measures

The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka organized an awareness program for the real estate sector on “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Obligations and New Developments” on June 26, 2023.

The keynote address was delivered by Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka/Chairman, National Coordinating Committee on AML/CFT, and W S Sathyananda, Secretary to the Ministry of Urban Development and Housing, Eng. R H Ruvinis, Chairman of the Construction Industry Development Authority (CIDA) and Hardy Jamaldeen representing the real estate sector also addressed the gathering, while Sarana Karunaratna, Chairman of the Condominium Management Authority (CMA) also graced the occasion. The event was participated by over 120 participants from the industry as well as officials from the Registrar General’s Department, Colombo Land Registry, Condominium Developers’ Association of Sri Lanka (CDASL), CMA, The Ceylon Chamber of Commerce and Urban Development Authority.

While addressing the gathering, Dr. Weerasinghe emphasized the importance of real estate sector and highlighted that the successful implementation of the AML/CFT obligations within the sector would ensure that Money Laundering and Terrorist Financing (ML/TF) risks in the sector are mitigated while fulfilling the obligations under international recommendations, governance, and anti-corruption framework.

He stated that such efforts would further strengthen the AML/CFT framework of the country and invited the sector stakeholders to work closely with the FIU and with the Ministry of Urban Development and Housing towards this national endeavor.

Recommendations

The sector regulators are requesting the companies engaged in the real estate business to seriously consider the following recommendations to improve the level of compliance:

• Carry out registration under the CIDA as a mandatory requirement.

• Establish a “Task Force” with the sector stakeholders to come up with a

suitable legal framework to regulate the real estate sector.

• Conduct Customer Due Diligence (CDD), not just on paper but to identify,

assess, monitor, manage sector clientele and take effective actions to mitigate

ML/TF risks using a risk-based approach that requires enhanced measures

when the risks are higher.

• Carry out CDD with respect to the customer, beneficial ownership, and

business relationship, and maintain records of transactions.

• Take additional measures to identify politically exposed persons (PEPs)

including enhanced monitoring.

• Implement policies, procedures, and internal controls against ML/TF risks.

• Implement targeted financial sanctions and freeze assets or take action

immediately against persons and entities designated by United Nation

Security Council Resolutions (UNSCRs) 1267 and 1373, or other UNSCRs, and communicate the same to competent authorities.

• Report suspicious transactions to the FIU, where relevant.

• To find out appropriate framework for further actions by a committee with

representing stakeholders of the real estate sector. – CBSL