Author: Marina Palmulli
Committe: Real Estate
In October 2022 the European Commission published a report on the assessment of the risk of money laundering related to cross-border activities. Particularly interesting is the Commission Staff Working document that, in the description of the risk scenario in the Real estate sector, stressed that this market “ is as attractive to criminals as it is to any investor (prices being generally stable and likely to appreciate over time) and is also functional (the property can be used as a second home or rented out, generating income). Real estate also provides a veneer of respectability, legitimacy and normality”(1): really interesting for criminals! In add, it has to be considered that “beneficial ownership” is not so easy to be identified.
UE Commission report was especially related to Covid-19 pandemic period were a lot of commercial retail and hospitality businesses had financial problems, and criminals made their business and Eppo was not operating yet.
Nowadays, after energy sources price increase, mortgage rate and inflations arising, the problem could more and more affect all real estate field: commercial and residential. Considering the international resumption of business and tourism, foreign capital attractions toward Italian assets and investments, we must not undertake risks related to money laundering.
Another big impact has the short rental theme, difficult to regulate in the UE and also abroad, having a large part in tourism hospitality, a new area in which criminality is interested in, and with clear cross-border orientation, where transaction are digital, not big amounts but significative in the turnover. A problem UE Parliament is debating (2).
Eppo is facing this new scenario and surely it will positively contribute to lower risks related to real estate market, also in cooperation with other UE organisms.
In order to increase the fight against money laundering and other criminal activities, in March 2023, the European Parliament examined the proposal for a regulation of the European Parliament and of the Council establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) 1094/2010, (EU) 1095/2010. The new proposed UE organism, is a central organism, and is forecasted that “The Authority should establish cooperative relations with the relevant Union agencies and bodies, including Europol, Eurojust, the EPPO, and the European Supervisory Authorities, namely the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority”(3).
The anti money laundering strategy forecasts also a review of regulation with identification of crimes and new punishment for abetting. EPPO is more and more an important actor in the UE strategy for fight against money laundering in cross-border transactions.