The real estate market has long provided a way for individuals to secretly launder or invest stolen money and other illicitly gained funds.
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How do corrupt enjoy their illicit gains without getting caught? Far too often, by buying luxury property in the world’s most sought-after cities.
The decision of where to invest in real estate will depend on the stability and reliability of the real estate market in the country, as well as on the risks of having a dirty deal uncovered and punished. Not surprisingly, the corrupt and criminal favour stable markets with inadequate anti-money laundering laws and where anonymity is guaranteed.
Investigations show real estate data can be a powerful tool to detect potential money laundering and other criminal activities. Access to property-related data – such as legal and beneficial ownership, historical ownership data, value and dates of purchase – can go a long way towards exposing key red flags for authorities, journalists and activists.
In 2017, Transparency International published an analysis of anti-money laundering and corruption prevention mechanisms in the real estate sector in four key markets. The report – Doors wide open – identified ten main problems that have enabled corrupt individuals and other criminals to easily purchase luxurious properties anonymously and hide their stolen money in Australia, Canada, the United Kingdom and the United States. Now, our new report analyses the availability of key real estate data in these four significant property markets.
The limited availability of real estate data and of beneficial ownership data, in particular, means that we still know very little about who owns properties, and whether they have been purchased with dirty money. This continues to be the case in the four markets – Australia, Canada, the United Kingdom and the United States.