The Cost of Non-Compliance: AML Breaches in Malta's Real Estate Sector

Real estate is one of the top global channels for money laundering favoured by criminals. It allows for large amounts of money to be transferred in a single transaction making it a highly attractive vehicle for laundering illicit funds.

Over the last four years, more than €200,000 in administrative penalties were imposed across the real estate sector in Malta, with fines ranging from €20,000 to €50,000 per notary or real estate agent for failures in AML compliance.

Most Common AML Breaches in Real Estate Sector

1. Weak Risk Assessments: Inadquate business risk assessments and sector-specific real estate risks not factored in the customer risk assessment compromising the entire AML framework.

2. Inadequate Customer Due Diligence: Systemic issues showing gaps in understanding and implementing of AML obligations, such as, beneficial ownership obligations for corporate buyers/sellers.

3. PEP and Screening Failures: Leading to the inability to detect high-risk clients.

4. Failure to Report Suspicious transactions: Serious offence cutting the flow of crucial intelligence to authorities.

5. Outdated Policies, Poor Records and Lack of Training: Insufficient AML knowledge, lack of training attended by the MLRO, missing files and policies not-fit-for-purpose.

Subject persons are encouraged to be proactive, implement robust risk methodologies, and adopt appropriate policies, controls and procedures to safeguard their business.

Get in touch if you would like support in reviewing your current AML framework and understanding how these findings may apply to your practice.