The real estate industry is gearing up for when it is covered by anti-money laundering laws.
Advisory firm AML Solutions said property was a favoured mechanism for laundering money. Photo: 123rf.com
The sector comes under the scope of the legislation at the start of next year, which already applies to banks, finance companies, sharebrokers, and casinos.
An estimated $1.35 billion from criminal activities is laundered in this country each year, and property is seen as one of the prime means of hiding criminal proceeds.
The Real Estate Institute has created a cloud-based software for agents to report transactions and vet buyers, and its chief executive, Bindi Norwell, said the industry was taking its obligations seriously.
Real Estate Institute chief executive Bindi Norwell Photo: supplied
"Any industry that deals with money should be expected to comply with the law ... and we're really happy at how seriously real estate agencies are taking this on board."
The advisory firm helping the real estate industry, AML Solutions, said property was a favoured mechanism for laundering money.
"The real estate industry is open to a relatively high risk of laundering money," AML director Richard Manthell said.
He said it was no surprise that three cities with strong property markets - Sydney, Vancouver, and London - were also regarded as hotspots for money laundering.
Mr Manthell said the legal profession, which comes under the law at the start of July, has been dragging the chain in complying with the new law.
He said part of that was the need to change internal systems to capture the necessary information, which many law firms were not up to speed on.
"And also a lot of the lawyers also questioned why they should be captured [by the law]."
Accountants will be required to report any suspicious transactions from October.
An Auckland based foreign currency firm, Ping An Finance, was convicted for failing to report more than 100 transactions and fined $5.3 million. The Crown is now seeking to shut down the company to recover the unpaid fine.
Listen to a documentary about money laundering in New Zealand from RNZ's Insight programme