Anti-Money Laundering Initiatives for the South African Real Estate Market

1 Journal of Comparative Urban Law and Policy 197 (2017)

7 Pages Posted: 6 Feb 2020

See all articles by Jeffrey R. Boles

Jeffrey R. Boles

Temple University - Department of Legal Studies in Business

Date Written: March 13, 2017

Abstract

South Africa operates as a major African financial center, with its robust banking and financial sector and significant cash-based market, and it consequently exposes itself as an attractive target for criminal activity generally and money laundering in particular. Long known as a money laundering hotspot, South Africa shows a low prosecution rate under its main anti-money laundering legislation. Former Finance Minister Trevor Manuel estimated in 2001 that between 2 billion and 8 billion US dollars are laundered through South African institutions annually. The South African real estate market in particular provides opportunities for criminals to launder their funds through purchasing and/or developing properties. Criminals can use the luxury real estate market in the Western Cape Province, for instance, to launder sizeable amounts of illicit funds through buying high-end properties via cash and offshore shell companies that hide their true owners, and the purchased real estate functions as the means to launder the criminal proceeds. Money laundering in real estate is a classic method of laundering money given that the funds can be hidden in real estate by multiple transactions cloaking the illicit source. This Article analyzes money laundering in the South African real estate sector, and in particular, “the darkest corner of the real estate market: all-cash purchases made by shell companies that often shield purchasers’ identities,” and recommends specific initiatives that may help combat the offense in this sector.

Keywords: money laundering, real estate

Suggested Citation

Boles, Jeffrey R., Anti-Money Laundering Initiatives for the South African Real Estate Market (March 13, 2017). 1 Journal of Comparative Urban Law and Policy 197 (2017). Available at SSRN: https://ssrn.com/abstract=3518759

Jeffrey R. Boles (Contact Author)

Temple University - Department of Legal Studies in Business ( email )

Philadelphia, PA 19122
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/dr-jeffrey-boles/

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
4
Abstract Views
27
PlumX Metrics