New regulations issued in Oman to stop money laundering in real estate sector

As part of the regulation employees must be trained on how to detect suspicious transactions

  
Image used for illustrative purpose. Satellite Dishes Littering the Roofs of Houses, Oman.

Image used for illustrative purpose. Satellite Dishes Littering the Roofs of Houses, Oman.

Getty Images/Kirsten Holst

Muscat: Real estate firms and developers in Oman will need to make sure they do not accept funding for projects from questionable or dubious sources, under a new decision issued by the Ministry of Housing and Urban Planning.

Issued by Dr Khalfan bin Said Al Shuaili, the Minister for Housing and Urban Planning, the decision aims to combat the practice of money laundering.

Under this regulation, real estate firms, brokerage houses and developers will need to bear the responsibility over accepting funds acquired through money laundering, or other dubious sources.

This needs to be done by assessing and understanding their sources of funding, taking into account the profiles of their customers, the countries from where the money is sent, and monitoring all of their services and procedures to help reduce and control the risks related to money laundering.

Issued in keeping with global trends to counter the impact of money laundering, the regulation also states the need for high standards for employees to adhere to, and carry out a study to assess the risks of financing through laundered money, the results of which can be shared with real estate companies, developers, and others related to the field.

As part of the regulation, which contains 33 articles, employees must be trained on how to detect suspicious transactions and the activities associated with them. Similarly, an effective audit system must be introduced to verify compliance with external and internal control processes, and policies put in place to act as a deterrent to using laundered funds to finance economic activities.

Employees also need to be regularly trained to make sure they are up to date with the latest financial systems, while procedures that companies need to follow when they come across such cases also need to be looked at. Furthermore, risk assessment procedures must be documented and regularly updated so that companies are familiar with the latest standards required from them.

Procedures must be drafted in writing, so that they can be submitted to the proper government organisations when needed. Enhanced due diligence measures need to be applied in the case of high risk customers, which can be mitigated in case of those considered low-risk, i.e., those who are not suspected of money laundering.

The National Centre for Financial Information must also be informed, in case transaction values exceed the set limits.

Client details that real estate companies must find out include legal status, employment activity, the purpose and nature of the business relationship they wish to have with the company, determine the real beneficiaries to any relationship, making sure they have all the necessary official documents, and to not provide services to those who have anonymous or secret bank accounts or operate under false names.

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