Companies involved in property purchase:

The AML National Analysis Risk conducted by the ‘Conseil d’orientation de la lutte contre le blanchiment de capitaux et le financement du terrorisme’ (“COLB”) in September 2019 qualified the AML risk in the real estate sector as being “moderated”. The risk of laundering funds resulting from corruption offences and embezzlement of public funds is, however, considered as being “high” for luxury real estate. In such schemes, real estate companies are used to hide the identity of the beneficial owner of a property. This risk is exacerbated by the fact that the transfers of SCI shares do not require notarial deed or countersigned by lawyers - both subjected to AML/FT obligations - and can thus escape these professionals' scrutiny .

In the 'biens mal acquis' proceedings, Tracfin, the French FIU, identifies the acquisition of real estate in wealthy districts of Paris via Real Estate Civil Societies (SCI) as being the main vehicle for laundering the proceeds predicate offences . There is a slight improvement: in its last annual report, Tracfin notes a small increase of legal persons, especially Real Estate Civil Societies (SCI) and trusts, in the banking sector's declarations of suspicious activities .

Companies involved in public contracting: Legal entities that do not comply with their reporting obligation risk, among other sanctions, exclusion from public contracting.

Peer reviewer: 1

Updated: October 31, 2020