With the upcoming anti-money laundering and counter-terrorism financing (AML/CTF) tranche 2 regulatory requirements due to come into force from July 1 next year, it's time Australia's real estate agents began their compliance journey according to expert panelists at a recent event in Melbourne.
AUSTRAC National Manager, Daniel Mossop and CEO of the Real Estate Institute of Victoria (REIV), Jacob Caine, outlined the size of the problem in the real estate sector by highlighting around 60 per cent of all the Australian Federal Police's criminal asset confiscation in the last five years were property assets.
Both were speaking at a recent event held in Melbourne hosted by global AML experts AMLHUB where Mossop acknowledged the new AML laws will cause some confusion in the industry but said AUSTRAC was committed to assisting the sector work through the changes.
"While that's close to a billion dollars in assets, it's only the tip of the iceberg - purely representing what the AFP can directly prove as being from the proceeds of crime and what they can get their hands on," Mossop said at the event.
He suggested the AUSTRAC website and newsletter contains "what people should be doing from an AUSTRAC perspective to get ready for the changes".
"Have a think about your own business and the types of clients and risks you see in your business. Are you a business that deals a lot with overseas customers or deals a lot with businesses as opposed to individuals?
"There are different questions you can ask to better understand the types of risks that you face before duplicating that with some of the AUSTRAC risk assessment products, which tell you about what the different risks are," Mossop said.
"Also, real estate agents should engage with their peak bodies like the REIV."
Caine said the REIV is awaiting the finalisation of the new regulations before conducting a full awareness and education programme. He said it was 'important agents approach the REIV for advice and assistance on ensuring they're ready-to-go when the laws come into effect next year.'
"The programme will let people know what's coming as well as consist of webinars with credible organisations in the space such as AMLHUB. We'll also devise curriculum to support agencies implement the policies and procedure they need to put in place to comply with the new laws," Caine said.
For Caine, the earlier real estate agents get these processes and systems integrated into their workflows, the better prepared they will be for July 1 next year.
AMLHUB CEO, Richard Manthel, agreed the best advice is real estate agents should "engage early in the process and not wait until the last minute".
Since New Zealand implemented their own AML/CTF regulations for the property sector back in 2019, Manthel estimates his company have assisted close to 70 per cent of real estate companies.
"We've helped every single major brand, and it's been quite a journey," Manthel said.
"AMLHUB provides a bespoke service tailored to each client to ensure the best results with the lowest impact on them. Our goal is to ensure each client meets their obligations correctly the first time."
AML Compliance Officer Ashleigh Henderson from leading NZ real estate agents Barfoot & Thompson said it's all about having the right culture in place and ensuring people understand the implications of the regulations.
"If you don't have a good company culture of compliance, it's not going to be a successful rollout and you're potentially going to end up n trouble with the regulators," Thompson said.
"It is really important that culture and understanding are nailed in the very first instance."
For Mossop, AUSTRAC are not expecting perfection on day one, but we do expect that people are making their best efforts.
"If people are genuinely trying to comply to the best of their capability and ability as we sort of transition through, then that's fine - AUSTRAC is not gunning for you," he said.
"I think it's a great opportunity for our sector to get some uplift in terms of the regard in which we are held," Caine said.
