As follow up of what has been written here in past entries , the Anti-Money Laundering Law classifies a number of activities considered as vulnerable. Among these, the Real Estate Brokers are obligated to the compliance of this Law.
According to this Law, it is considered as a vulnerable activity “the common or professional provision of services of intermediation in the transmission of property, or constitution of rights over real estate, in which operations of purchase and sell in favor of the clients that they represent are conducted”.
In a zone such as Puerto Vallarta, a very renowned touristic attraction in Mexico, the real estate brokers are especially important since they promote the investment in real estate. Because of this they need to be conscious of the repercussions that the Anti-Money Laundering Law has in the Real Estate Market.
Identification of Clients and the submission of monthly reports through the Anti-money laundering SAT website
Apart from the general obligations shared by all the vulnerable activities, the real estate brokers have to submits reports according to the thresholds established by the law.
There is no threshold in the amount of the operations to identify their clients, this means that they have to identify all the clients to whom they have provided professional services regarding real estate brokerage. Meaning that all the documents needed to obtain the information regarding the identity of the client must be gathered.
Regarding the reports through the anti-money laundering website, only the transactions higher than $646,815 MXN must be reported. It is very important to note that this amount is only considering the commission collected by the real estate broker, not for the whole amount of the purchase/sale of the property.
The mandatory information that has to be included in the monthly reports is:
– Features of the property, such as:
⦁ Type of property
⦁ Transaction amount
⦁ Land and construction size
– Information about the public deed
⦁ Number of public deed
⦁ Date of the public deed
– Information about the method of payment
These reports have to be filed with special care, since the submission of incorrect information is enough to have to pay a fine, if revised by the authority.
Thorought vigilance in real estate operations
These types of activities are the most monitored by the anti-money laundering law, since, depending on the way the transaction is made, it is possible that up to 5 or 6 people have to report the same operation.
The authorities understand that the real estate operations are considered as the second most vulnerable activities for everything related with money laundering, the first place being the purchase/sale of cars. This is why they have been implementing different reforms in order to make sure that it gets progressively harder to use the real estate market for illegal activities.
What can be expected in the future about the prevention of Money Laundering in real estate markets?
According to FAFT’s last report, the notaries in Mexico have been a key element to reinforce the anti-money laundering procedures. And the notaries are also the ones who consider that the real estate market is the riskiest of all, in terms of money laundering.
Also, the SAT has reported that their revisions are focused mostly in high-risk activities, such as real estate operations and those regarding casinos and notaries.
The FAFT recommends that in the future, the obligated subjects are expected to comply with the requisite of sending Annual Anti-Money Laundering Audit Reports. It must be taken into consideration that, historically, the reforms to the Anti-Money Laundering Law have always tried to standardize the law with what is recommended by the FAFT, this is why is very likely that this obligation is implemented in the future.
Regardless of what might happen in the future, currently we are in front of a scenario in which the SAT is monitoring more thoroughly the real estate operations. This is why it is very important to comply with the obligations established in the Anti-Money Laundering Law, therefore, it is very important to get close with experts in this matter that are able to help you to make a diagnosis and from there, elaborate a compliance plan, personalized for your economic activity.