ANTI-MON­EY LAUN­DER­ING AND COUNTER-TER­ROR­ISM FINANC­ING (AML/CTF) LAWS

By Kather­ine Dean — direc­tor MIGLIC DEAN

Under the strict Anti-Mon­ey Laun­der­ing and Counter-Ter­ror­ism Financ­ing (AML/CTF) laws over­seen by AUS­TRAC, real estate agents, con­veyancers, and lawyers must per­form manda­to­ry Cus­tomer Due Dili­gence (CDD) on all prop­er­ty transactions.

The pri­ma­ry require­ment dic­tates that real estate agen­cies can­not mar­ket a prop­er­ty until the sell­er’s iden­ti­ty is ver­i­fied, and they must vet buy­ers before a trans­ac­tion com­pletes. The detailed com­pli­ance rules are out­lined below.

Require­ments for Ven­dors: Real estate agents must com­plete all back­ground ver­i­fi­ca­tion steps the moment they are engaged by a client.

1. No Mar­ket­ing With­out ID: Agen­cies are legal­ly barred from adver­tis­ing, list­ing, or mar­ket­ing a prop­er­ty until iden­ti­ty ver­i­fi­ca­tion is complete.

2. Own­er­ship Ver­i­fi­ca­tion: Sell­ers must prove they legal­ly own the prop­er­ty being sold.

3. Enti­ty Trans­paren­cy: If sell­ing via a busi­ness, trust, or Self-Man­aged Super Fund (SMSF), full struc­tur­al doc­u­men­ta­tion must be reviewed to find the ulti­mate human owners.

Require­ments for Pur­chasers: Vet­ting typ­i­cal­ly begins as soon as a for­mal offer is accept­ed, or ear­li­er if using a buy­er’s agent.

1. Accept­ed Offers: Once an offer is accept­ed, the sell­ing agent will launch the com­pli­ance process.

2. Source of Funds (SoF): Buy­ers may be asked to doc­u­ment how they acquired the trans­ac­tion mon­ey (e.g., bank mort­gage, per­son­al sav­ings, inher­i­tance, equi­ty, or fam­i­ly gift).

3. Buy­er’s Agents: If you hire a buy­er’s agent, they must com­plete these checks before pro­vid­ing any prop­er­ty-seek­ing services.

Core Cus­tomer Due Dili­gence (CDD) Process: Every trans­ac­tion requires stan­dard screen­ing regard­less of prop­er­ty size, val­ue, or location.

1. ID: Pri­ma­ry Pho­to ID: Indi­vid­u­als must pro­vide gov­ern­ment-issued pho­to iden­ti­fi­ca­tion (e.g., a cur­rent dri­ver’s licence or passport).Secondary Ver­i­fi­ca­tion: Full names, dates of birth, and res­i­den­tial address­es must be cross-matched against util­i­ty bills or bank statements.

2. Ulti­mate Ben­e­fi­cial Own­ers (UBO): For cor­po­rate or trust buy­ers, agents must iden­ti­fy any indi­vid­ual hold­ing a 25% or greater own­er­ship stake or con­trol­ling interest.PEP & Sanc­tions Vet­ting: Every client is auto­mat­i­cal­ly screened against inter­na­tion­al finan­cial sanc­tions and Polit­i­cal­ly Exposed Per­sons databases.

3. Trans­ac­tion Pur­pose: Clients must state the eco­nom­ic pur­pose of the pur­chase or sale to ensure it match­es their finan­cial profile.

Inclu­sions: The rules strict­ly cov­er all res­i­den­tial, com­mer­cial, rur­al, vacant land, and off-the-plan sales.

At MIGLIC DEAN we have a com­pre­hen­sive (but sim­ple to use) ful­ly- com­plaint AML process. For fur­ther infor­ma­tion please don’t hes­i­tate to reach out to the team at MIGLIC DEAN