Real Estate Developers Association of Nigeria (REDAN) has revealed ways it is collaborating with financial crime agencies to curb sharp practises like money laundering and other illegalities in the real estate sector.
REDAN President, Ugochukwu Chime disclosed that the association is working with the Economic and Financial Crimes Commission (EFCC) and Special Control Unit on Money Laundering (SCUM) since 2010 in making sure that the Nigerian real estate sector which was rated in 2016 by international assessors as a medium high risk area for terrorism financing and for money laundering is sanitised.
Chime mentioned that in recent years there has been an increase in that collaboration. He said; ‘’In Abuja and many cities in Nigeria, there are a lot of houses abandoned by the owners because of the source through which the money was gotten. So because of the high level of illicit funds that are flowing into the sector, it became necessary that REDAN will arise and work together with SCUML to put in place a mechanism to control in the inflow of funds, both for developments and for the purposes of those who are buying those houses, so that we will be able to ensure that our sector does not become the preferred sector for such illegal activities.’’
Apart from money laundering, he mentioned that a third dimension has been imputed into it recently, and that is the dimension of small arms procurement using the sector to fund some bandits and some insurgents. ‘’So what we have done is to have a provision in our membership form that requires every member to be registered with SCUML and to be able abide with the policies and regulations and the procedures of SCUML in terms of control of money laundering and in terms of suspicious activities reporting,’’ he added.
REDAN is working collaboratively to find a mechanism to ensure that both SCUML and REDAN have an alignment of internal mechanisms. Under this arrangement, any developer that wishes to register with SCUML will also be required to register with REDAN.
‘’REDAN will do proper due diligence in our form and be able to ensure that we know your office. If you are developing an estate, we will be able to endorse it and know the source of your funding, and ensure that you comply with the extant laws, especially the anti-money laundering and terrorism financing act 2011. And we will also be able to ensure you understand the risk to which you are putting your organisation because if your company is found to be a source of money laundering, it has very serious legal consequences. And that is why we are working with SCUML and other agencies to make sure that we enhance training of our members so that they know the risk of non-compliance and be motivated to comply,’’ he said.
He said that one of the key information they have shared with SCUML is the knowledge about the three groups that operate in the real sector. These groups are the professional estate surveyors and valuers; the brokers who intermediate between sellers and buyers of properties, e.g lawyers, estate valuers, estate agents etc; the third group are the business investors who came in a few decades ago to build mass housing, affordable housing, and high end housing.
‘’So what we are doing is to ensure that we anticipate this growth and paradigm shift in home ownership approach and the sectorial activities in the real estate sector with a view to ensuring that developers are compliant with extant laws and are complaint with that which will ensure not only that we will have shelter but that will have employment, economic growth and above all, we do not become a conduit for money laundering and for political exposed persons to take away public money through the sector,’’ Chime said.
For defaulters and developers who fail to register with REDAN, the government has established effective mechanisms that will clamp down on them. Going further, Chime said, it will be illegal to develop properties without having an association to regulate what you are doing.
‘’Many have been duped, houses are collapsing and all kinds of indecent activities are happening in the sector because the perpetrators are not part of the guidelines that are being issued. This is what we want to change.’’
In tightening the noose at REDAN, Chime stated that every member of the association must renew their membership every year, and for that to happen they must have done some professional development in terms of training to know what is expected of them by various regulatory agencies operating in the sector.
