More regulation is hitting the estate agent and property industry in 2018. We expect new guidance on anti-money laundering and combatting the financing of terrorism legislation from the Gibraltar OFT shortly.

The Office of Fair Trading (OFT) has been appointed as a supervisory authority under the Proceeds of Crime Act 2015 (POCA). POCA is a Gibraltar law aimed at preventing the abuse of the financial system for the laundering or illicit money and the financing of terrorism. It also sets out processes relating to the confiscation, investigation and recovery of the proceeds of unlawful conduct.

The OFT will be specifically regulating estate agents for compliance with anti-money laundering and combatting the financing of terrorism (AML/CFT) legislation. The OFT aims to prevent estate agents from being used for money laundering and terrorist financing through effective supervision, regulation and enforcement.

The risk of real estate being used for the laundering of money in Gibraltar is considered high as set out in the government’s AML/CFT National Risk Assessment 2016. It seems that Gibraltar’s strong property market and stable economy can be attractive for money launderers.

Even though most of these transactions involve other regulated entities such as banks, law firms and other institutions, risk factors must be identified by estate agents to avoid becoming a target to criminal organisations looking to launder illicitly obtained money. We must be aware of the risk posed by the purchase of real estate as a tool for placement, layering and integration of funds from illicit sources. 

We expect formal guidance to be issued in 2018 after which our processes will be amended (if necessary) to ensure full compliance.