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“Real Estate Is Critical To Money Laundering”, Says BSP

Richard Marley
November 15, 2021
3 minutes read
2029

The Governor of BSP bank emphasized the urgent need for brokers to guard real estate against money laundering and terrorist financing activities.

The Governor of Bangko Sentral ng Pilipinas (BSP), Benjamin Dioknon addressed the Real Estate Brokers Association of the Philippines 43rd Annual National Convention on 12 October 2021.

The rise of ML/TF activities and inconsistent law implementation have made the real estate industry prone to launderers, hence the Governor emphasized the importance of real estate brokers “in holding the integrity of the financial system” and how they should be vigilant of suspicious buyers.

He also noted the fact that criminals invest money earned by illegal means into real estate due to its reliable and stable pricing system. But then, “financial instability rises due to volatility in asset prices.”

BSP Governor Benjamin E. Diokno today at the Real Estate Brokers Association of the Philippines, Incorporated's 43rd Annual National Convention. pic.twitter.com/2ESPb8uEJ8
— Bangko Sentral (@BangkoSentral) November 12, 2021

He stated that “Condominiums and other real estate properties are found to be criminal assets generated from fraudulent, corrupted, and illegal drug trafficking activities.”

He made the statement after being aware of the filed petition from the AML Council regarding the “civil forfeiture of assets” which involves Cebu’s real estate property related to illegal drugs.

The AMLC move was a result of confiscating almost P30 million worth of real estate money that was “used as a means to hide the proceeds of crime or as an instrumentality of crime, including TF”.

Lastly, he stated that purchasing real estate properties incorporate illegal funds into the legal economy and when used for business activities proves to be a legitimate source. Hence, there is an urgent need for industry specialists to act accordingly for effective AML/CFT compliance.

Suggested Read: Philippines: Banks Reminded to Closely Monitor and Report Suspicious Transactions

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