Real estates promoting corruption, money laundering in Malawi- FIA
The Financial Intelligence Authority (FIA) has accused the real estate sector of promoting corruption and money laundering in the country.
Malawi: The Financial Intelligence Authority (FIA) has accused the real estate sector of promoting corruption and money laundering in the country.
During a stakeholder meeting in Lilongwe on Wednesday, Director General Jean Priminta stated that corrupt criminals launder their ill-gotten money through real estate by purchasing properties such as land and houses without the oversight of both the Anti-Corruption Bureau (ACB) and the Financial Intelligence Agency (FIA).
According to Piriminta, when purchasing property, corruptors use third parties, most of whom are family members.
She also stated that using unlicensed and unregulated real estate is common in order to avoid the reporting thresholds.
She said: "The real estate sector has a number of players who are unregulated and hard to control and transactions with their customers who are mostly corruptors. It is also more difficult, especially where transactions are through cash and not bank wiring. If there was a law that allowed buying property through electronic wiring alone, a lot of illicit property business through the sector would have been detected."
The 2019 mutual evaluation report shows that only 52 of the country's 258 real estate agents are licenced, with the rest having transactions that are difficult to trace.
According to the 2018 National Risks Assessment (NRA) report, over USD 18,711,123.99 million entered the real estate market, with only USD2,723,992 confiscated and USD384,501 frozen.
Dr Lucky Kabanga, Chairperson of the Real Estate Taskforce, blamed the influx of briefcase estate agents on government regulating agents, claiming that they do not communicate with one another when it comes to regulating the sector.
He said: " Requirements for entry into the sector as an agent is a degree in real estate, work under the supervision of a registered valuer or estate for two years and then register through Surveyors Institute of Malawi(SIM), but instead people evade the rigorous by SIM to register with the company registration which has lesser entry requirements and most of them do not meet all the requirements as stated."
He has since urged the land economy body to reconsider revising the law to allow only SIM on regulation in order to avoid conflicting laws in which one body allows what another prohibits.
Deputy Minister Deus Sandram promised a bill proposal to have a law that can control dirty money transactions through real estate.
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