Tighter regulations coming for real estate developers

Leader of Government Business in the Senate, Kamina Johnson Smith, has given the assurance that potential loopholes in the legislation governing the reporting requirements for real estate developers will be addressed when the laws come up for review.

Her assurance came against the background of concerns raised by Leader of Opposition Business in the Senate, Peter Bunting, on Friday, during the review of ‘The Terrorism Prevention (Designated Reporting Entity) (Trust and Corporate Services Providers) Resolution, 2022’. Bunting said that while the relevant legislation targets real estate dealers, it does not address the category of real estate developers.

“I think we have a reporting requirement for real estate dealers but I think there is a gap because many real estate developers don’t necessarily go through dealers but do the selling themselves. It provides, I think, an opportunity for the construction financing to be used to launder illicit funds and when the (housing) units are sold, the proceeds come into the bank systems effectively laundered. Developers who have that in mind would have an incentive to use their own sales team and not go through a registered real estate dealer that has reporting requirements and therefore might flag some of these as suspicious transactions,” he explained.

In response, Johnson Smith acknowledged the point raised by Bunting noting that the laws for dealers and developers are up for reform.

“The matter of closing gaps that exist is one on the agenda,” she pointed out.

In supporting the bill which was passed without amendment, Bunting said that the findings of a national risk assessment report released in August 2021 found that real estate developments faced the second-highest risk in terms of vulnerability to scamming, behind remittance companies.

He said it continues a long process of the Government working with the Financial Action Taskforce as well as the Caribbean Action Taskforce to continually strengthen and upgrade our laws and regulations related to the threats from money laundering and terrorism financing.