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FIA: Real estate sector prone to money laundering

FILE PHOTO: Mirembe Villas estates, Kigo

Kampala, Uganda | THE INDEPENDENT | The Financial Intelligence Authority (FIA) Deputy Executive Director, Michael Olupot Tukei has said the real estate sector is prone to money laundering.

The sector, according to Olupot has not received much attention making it easy for money launders to transact in the real sector without being detected.

Olupot says that the authority categorized real estate as high-risk sector in its report released last year.

The report revealed that money laundering for the sector is considered high, with overall vulnerability at 1.0 and quality of controls rated at 0.0.

“The high rating is largely driven by the poor knowledge of anti-money laundering among staff, the low quality of anti-money money laundering supervision and oversight and the low effectiveness of compliance functions. The poor entry controls into this sector exacerbated the vulnerability of the sector,” the National Risk Assessment Report says.

Olupot said it’s a priority of the FIA, Ministry of Lands and other authorities to put in place efficient anti-money laundering regulatory frameworks and monitor their implementation by all stakeholders in the sector to ensure laundering of dirty money through the sector is minimised.

The priority, he says will be extended to sensitisation of real estate agents and promotion of establishment of internal anti-money laundering compliance programme in real estate companies.

The FIA report says criminals can be easily drawn to the real estate as a channel to launder illicit funds due to the ability to buy real estate using cash; ability to disguise the ultimate beneficial ownership of real estate; relative stability and reliability of real estate development; and ability to renovate and improve real estate and thereby increase the value.

“The real estate sector is affected by the different types of predicate offences which lead to money laundering and terrorism financing such as forgery and manipulation of records, fraud, tax evasion and embezzlement,” the report revealed.

Olupot says, unlike in other countries, foreigners who could be engaged in money laundering activities can easily buy and sale land in Uganda and real estate properties.

Government has in the past years turned its attention to the banking sector when fighting money laundering. The focus has now been extended to the gambling sector.

National Gaming Board Uganda (NGBU) and FIA officials on Thursday met casino owners to sensitise them on anti-money laundering initiatives.

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