As I wrote in 2018, a longtime favorite vehicle for money launderers, real estate as a means of hiding illicit proceeds has gained the renewed attention of regulators and legislators throughout the world.

The primary money laundering risk for the real estate industry is lack of transparency, specifically with regards to cash transactions and purchases by ever-problematic shell companies. Residual effects of real property purchased with illegal funds include artificial real estate market inflation and higher costs of living, especially in dense urban areas.

The basic AML principles of KYC, identifying legitimate business purpose, and conducting due diligence before the transaction don’t just apply to banks anymore.

As regulatory and legal initiatives grow to incorporate more facets of the financial crimes process, solid compliance programs will continue to become a critical concern for developers, realtors and facilitating companies.

Specifically, knowing your buyer will eventually mean more than some basic paperwork and the proverbial bag of cash.