Due diligence for real estate agents is not new in the italian legislation framework. Money laundering prevention rules has a long story in Italy, due also to criminal organizations interest in the real estate market. The main compliance real estate agents has to fulfil in the money laundering prevention are: identification, retention, risk assessment.
First duty, for a professional real estate agent is to verify the property holder and which is the certificate of origin (deed, inheritance, act of donation), the legal basis of property about the real estate he is going to trade. The same activity made on the “object”, must be done on the “subject”. It is absolutely true that a person with low incomes could have inherited from parents the family house , owned for decades, paid with bank loan in many years, and now the selling of that house could mean a transaction of a significant amount of money.
It could happen that to be interested in buying that house could be organized crime in order to help fugitives (last known case is Matteo Messina Denaro’s last lair) or made money laundering activity using a straw-man or company not necessarily based in Italy.
Unfortunately, criminal organizations are perfectly aware of legislations in the different counties and how to bending them. National competence on criminal subject has always been an highlight of criminal activity. Most of the work of our national authorities, from Procura di Palermo on, was the attempt to “follow the money” without the aim of an international legal framework.
The need to focus on money transactions in the EU area, where is granted “free circulation of persons, goods, services and capitals”, even more now, with cross-border transactions made via internet in the global market, is pressing.
When market changes, and in the last few years different situations contributes to (Covid-19, Ukraine crisis, interest rate increases), the criminal opportunities grow.
In December 2022 has been seizured an apartment in Cervinia bought through a company heading for a key person in the Qatargate meanwhile in Greece has been freezed a real estate company in Athens, created by other two investigated persons.
EPPO represents the opportunity to have national and international eye and focus on misconducts that can affect the whole economic system. Profits resulting from fraud, corruption or organized crime main activities, are often laundered using real estate investments.
As it is reported on EPPO website, through investigations on a VAT fraud involving office supplies by companies located in Triveneto (Italy), but also in various EU Member States (operation “Cheap Ink”), EPPO in Venice detained 18 suspected in January 2023. In this case, EPPO had the coordination of investigative units in many involved Member States, originated by a suspicions of the Italian Financial Police – Nucleo di Polizia Economico Finanziaria of Bolzano in 2020 started with “targeted administrative checks against companies operating in trade of stationery and consumables for printing equipment”. The fraud scheme involved over 30 suspects that, through a network of local companies, imported these goods in Italy without paying VAT. This allowed to resell products on the italian market to a lower price than other traders (unfair competition).
The criminal group, headed by two Paduan’s entrepreneurs, invested profits of fraud (about €58 millions) in various assets, including real estate (probably not only in Italy), promptly seized to recover damages to financial national and EU budgets (about €26 millions).
EPPO activity is extremely recent, but reports and cases could help to have a picture about how much money laundering impact real estate market in Italy and other participating Member States and how it could be undermined.
More and more nowadays is our interest, as UE citizens and professionals, to have a “clear” market in which operate, aware that our job is connected with persons and companies before than buildings.
Author: Marina Palmulli
Subcommittee: Real estate