CDD for real estate agents
Wwft and real estate agents
The Wwft is the Law on the prevention of money laundering and the financing of terrorism. The law is intended to combat terrorist financing and money laundering. As agent or mediator your work is covered by the Wwft if you mediate in the establishment, or conclusion, regarding immovable property or the rights associated with immovable property. The Wwft asks you to do a thorough investigation into the person you do business with: the client research. The core elements of the Wwft are the client research, the possession of a written risk assessment policy, the obligation to report, and the retention obligation.
For which agents does the Fourth Anti-Washing Directive apply?
Client research for real estate agents
According to the Wwft, a client survey consists of several steps.
The first step is to identify the client and to record identifying data. The client is the natural person, legal person or company who commissions you as agent for the purchase or sale of a property.
The third step should only be done an agent does business with a legal entity. In this case, the broker must find out who the Ultimate Beneficial Owner (UBO) is. This is the shareholder with more than 25% of the shares.
The second step consists of verifying the identity of the client, during which the broker checks whether the client data corresponds to a valid ID according to the Wwft. The Wwft allows for making a copy of the ID, this is not in violation of privacy laws. Under the Wwft, the data of the client research should be kept for 5 years.
The fourth step consists of checking whether the person with whom the broker does business is listed in the PEP-list or any other sanction list.
The measures towards PEP's are preventive in nature. This means that a PEP is not necessarily involved in criminal activity. Rejecting a business relationship, only because a client or UBO is a PEP, does not correspond to the principles of the Wwft.
The outcome of the client research may show that there is an unacceptable risk in doing business with the client, which prevents you from carrying out the service and requires you to refuse, or terminate, the business relationship. The Dutch tax authorities posted a risk matrix for agents on their website, in which several examples are included that indicate medium, high, or unacceptable risk. For example: if a client wishes to remain anonymous, or provides false identity information, this leads to an unacceptable risk. As an agent, you are not allowed to service this client. Or when a buyer wants to purchase a property without reservation of financing, this poses a mediocre risk. In this case you must carry out additional research into the background of the buyer(s) and possibly into the financing of the purchase. Depending on this outcome, you may be required file a report with the authorities.
In the end it is important that, as a broker, you have carried out a thorough investigation in which you have recorded the steps you have taken to ensure honest business. The supervision of compliance with the Wwft by brokers, intermediaries and valuers is exercised by a separate part of the Dutch Tax Administration: the Bureau Toezicht Wwft.
SCOPE CDD On Demand for real estate agents
With SCOPE CDD On Demand, you can screen your clients on all these points starting at €4.00, without the obligation to conclude a long-term contract. In addition, at the end of the audit, you will receive a certified report with the audit you carry out that serves as a legal record in the case of monitoring. SCOPE CDD On Demand provides a fast and automated process for the Customer Due Diligence, with UBO control and compliance screening. Better safe than sorry!
UBO Check for real estate agents
In addition, SCOPE CDD On Demand also allows you to perform a UBO-check that attempts to find out who the UBO of a company is. If your client is not a natural person, you are obliged to determine who the parties/individuals with an interest in the client are. The audit via SCOPE CDD On Demand automatically requests these records from the Chamber of Commerce. These extracts are analyzed to map the involved individuals and businesses. Using the mapped data an attempt is made to determine the individual(s) that should be classified as the UBO(s).
Want to experience the ease of client screening for yourself? Ask about your ten free starting credits today!