Money laundering in the real estate sector in Malta : a comparative study

Abstract

The real estate industry is a prime target for money laundering and criminal activity. Real estate can be used for criminal purposes in two ways: they can be traded to conceal the origin of illicit funds on a speculative and transparent market, or they can be used as a final investment, where criminals permanently park their money in businesses or houses. This study seeks to assess the effectiveness of Malta's anti-money laundering regulatory framework, with a focus on the real estate sector. It was prompted by numerous media reports pointing to the real estate industry as a conduit for money laundering. It seeks to determine whether money laundering was a problem in Malta and, if so, how it is being addressed in the real estate sector. The purpose of this study is to examine and compare the current Maltese legal positions on ML concerning real estate with other countries namely: the United Kingdom, Germany and Belgium. The author shall examine whether Malta is in line with these countries and whether more stringent rules should be implemented. Furthermore, the author’s main objective is to propose certain changes which will be beneficial to reduce such risk of ML in this sector. This may provide a way forward for legal professionals such as notaries; and for real estate agents to have a clearer guide regarding their AML obligations. The information provided in this dissertation is current as at 21st April 2022.