| Estate agents urged to assist in prevention of "Money-laundering" activities
The Estate Agents Authority has issued guidelines to remind practitioners to adopt appropriate preventive measures against "money-laundering" activities that might be conducted through property transactions.
Under the EAA guidelines, estate agents are required to adopt additional measures in client identification and documents retention. Where an agent has successfully arranged for the sale or purchase of a property by an individual client, then, upon the client's signing of the provisional agreement for sale and purchase, the agent should ensure that the client's name, address, and type and number of the identification or travel document (eg, Hong Kong Identity Card, passport, two-way permit for Mainland residents, etc.) are recorded on the executed estate agency agreement. In addition, the address of the property subject to the transaction, the transaction price and the date of execution of the provisional agreement for sale and purchase must also be added to the estate agency agreement. The estate agency agreement should be retained securely by the estate agent concerned for at least five years, and available to the relevant law-enforcement authorities for inspection when required. The EAA guidelines also remind practitioners to report promptly to the Joint Financial Intelligence Unit operated by the Police and the Customs and Excise Department any suspicious cases as per the examples published by the Police. (see below).
| Signs that may be indicative of "money-laundering" activities |
| Cash transactions in large amounts. |
| The transaction price differs significantly from the market price. |
| The vendor and the purchaser know each other, but choose to act through an estate agent as if they do not know each other. |
| The purchaser relies on another person to view the property and the ultimate purchaser is someone different. |
(The above indications have been provided by the Police. However, they do not necessarily imply the presence of "money-laundering" activities, nor are "money-laundering " activities signified by such signs only.)
Before issuing the guidelines, the EAA had consulted the industry on the recommendations suggested by the international "Financial Action Task Force on Money Laundering" Representatives from trad associations all considered that it would be a civic duty to assist the government in combating illegal activities, and that the EAA should issue appropriate guidelines to practitioners. They were of the view that the guidelines as published by the EAA were reasonable and feasible and would help the government to combat illegal activities without affecting normal property transactions and commercial operations.
The EAA and the Police jointly organized a series of seminars to provide estate agents with a better understanding of the usual means of "money-laundering" in order to help them identify and deal with such activities when they were to occur.
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