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Mills Gibbon and Co, a Wellington-based real estate company, has been warned by the Department of Internal Affairs (DIA) regarding its failure to report suspicious activity on multiple properties and not complying with regulations against the financing of terrorism and money laundering.
As this was the company’s first warning, the Department of Internal Affairs (DIA) issued a warning letter for failure to report suspicious activity at some of its properties as well as for not compliance with AML/CFT regulations. The DIA expressed its concern in a statement, saying that it is especially worried about the underreporting of suspicious behavior on rental properties. The business received a warning for its shortcomings after failing to establish an AML/CFT program, keep proper records, and conduct due diligence on customers. These actions fell short of what the DIA expected of businesses.
All real estate businesses are required by the DIA to comply with the standard duty and notify the police financial intelligence section of any suspicious activity. Mills Gibbon and Co., has received a warning for not adhering to the standard requirement, and no action will be taken to improve its processes. Nonetheless, there hasn’t been any evidence indicating the company’s involvement in financial crimes such as money laundering or terrorist funding, but still requires stringent measures and immediate action to rectify the area of non-compliance to mitigate risk.
Real estate is frequently used as a form of money laundering, according to Mike Stone, director of AML/CFT at the DIA. As a result, all firms must have strong procedures in place to reduce the danger of being abused by criminals.
Stone stated, “a compliant real estate sector is essential to prevent, detect, and deter criminals from using real estate as a method to clean their dirty money. We need real estate agents to understand the significant role they play in the AML/CFT system and in protecting the integrity of our financial system and of the real estate industry as a whole.” As stated in the report, Mills Gibbon and Co., has demonstrated a commitment to enhancing its AML/CFT compliance since receiving an official warning from the DIA in October.