Real estate agents must identify both the seller and the buyer. DOKS speeds up the different stages of real estate transactions. In the real estate sector, transactions involve large sums of money, so it is important to identify customers and check the source of funds to prevent money laundering. The Turku-based estate agency Huoneistomarkkinat Oy LKV uses DOKS to verify information, and it has speeded up and helped the different stages of real estate transactions in many ways.
The real estate sector wants to do its part in the prevention of money laundering. As a consequence of the Act on Preventing Money Laundering, the company has changed its practices so that most of the new customer relationships are checked in DOKS. In a real estate transaction, the agent must reliably identify both the seller and the buyer, which increases the work connected to identification.
“We have properties that may have as many as 10 owners, so it is a lot easier when we attend to customer due diligence and identification in DOKS using banking credentials. The system speeds up our work and makes the identification secure,” says the estate agent Rani Lohi at Huoneistomarkkinat Oy.
DOKS has proven in practice that it works well as a tool for business transactions and can be used to implement commissions and tenders. Lohi sees DOKS as an example of how various functions in the sector are becoming digitalised, which frees the agents’ time from routine tasks to other things.
Money laundering risk in the sector
Real estate brokerage is one of the sectors mentioned in the Act on Preventing Money Laundering as an obliged entity and one that is considered to be at money laundering risk.
In addition to customer identification and due diligence, estate agents are also obligated to check the source of funds. According to Lohi, Huoneistomarkkinat checks the source of its customers’ funds as far down the line as possible.
“90 per cent of customers are normal private consumers who take a mortgage, and then the bank also checks the customer’s background. If the buyer is a company, we must identify the source of the funds and verify the beneficial owners.
“Lohi tells that the Federation of Real Estate Agency has instructed its members well on questions related to money laundering. Approximately 10–20 reports in this sector are made annually to the Financial Intelligence Unit at the National Bureau of Investigation.