AML for Private Equity and Real Estate

This programme is designed to deliver a greater understanding of the necessary AML and Due Diligence measures required to minimize the threat to those in the Real Estate/Private Equity Sector.

PE Firms face two key risks in relation to money laundering:

• The first is being used to facilitate financial crime, including money laundering in the context of fundraising with the requirement to review systems and controls in these areas

• and the second are the risks in transactional activity and the risk of criminal money laundering offences.

The additional purpose of this training programme is to raise awareness among professionals about the risks of money laundering and terrorist financing in the RE/PE sector, but also to provide a breakdown of the international guidance to real estate agents and real estate developers to enable them to avoid transactions linked to a risk of money laundering and terrorist financing.

This key training programme provides an interactive experience for employees within the RE/PE sector to identify the key requirements and obligations they must undertake to avoid the risk of money laundering and terrorist financing, as well as the requirements to remain vigilant to the evolving complexities and risks. This blended learning programme has been designed to combine the instructor delivering the session with input and discussion with the students.  

An investment into a PE fund would normally be a low-risk product. In addition, institutional fund investors are generally lower risk customers who tend to undergo thorough due diligence processes, including AML-related know your customer, before being accepted as investors. Nevertheless, prospective investors based in, or with funds based in, a higher-risk third country should be subject to more stringent due diligence measures.

If a PE firm fails to take appropriate steps to identify and assess the AML risk to which it is subject, or to establish and maintain policies, controls, and procedures to mitigate and manage those risks effectively, it could risk committing a criminal offence.

As such, the amount and type of documentation that a PE Firm may need to collect for the purposes of its customer due diligence will be dependent on the nature of that investor (i.e. institutional/non-institutional, high risk factors), the reliability and reputation of the sources of the information provided, and the PE firm’s own risk-based approach to compliance with AML requirements.

PE firms are likely to encounter AML issues in transactional activity. These risks arise not only at the time of an original investment, but also throughout its ongoing ownership and its exit.

This workshop takes delegates through the International regulatory framework and the different levels of customer due diligence, KYC obligations for on-boarding new clients/third parties and for refreshing existing client files.

• Understand the definition and principles of money laundering/terrorist financing and why it can pose such a serious problem for the Real Estate and Private Equity Sector.

• Understand the requirements and process of the identification of the customer/his representative, and customer representatives (person purporting to act on behalf of or for the customer)

The programme will focus on:

• The Requirements for CDD/EDD
  

  • The risk-based approach and CDD/EDD obligations

  • PEPs and EDD requirements and undertakings

  • Conducting effective CDD & EDD measures to mitigate risk

  • AML regulatory framework and regulations and industry guidance on customer due diligence

• When and how to conduct enhanced due diligence (including source of funds and source of wealth validations for PEPs)

• • When and how to conduct risk-based periodic refresh/update of existing customer information

  • What needs to be done in practice when conducting risk-based customer due diligence

  • How to conduct independent research and background checks on complex beneficiary ownership structures

  • How to conduct third party due diligence, anti-bribery and corruption

Course Outline

• Develop an understanding of the AED AML/CFT regulatory framework and regulations and industry guidance on customer due diligence

• Understanding the levels of customer due diligence, in practice

• When and how to conduct enhanced due diligence (including source of funds and source of wealth validations for PEPs)

• When and how to conduct risk-based periodic refresh/update of existing customer information/data

• What needs to be done in practice when conducting risk-based customer due diligence

• What needs to be done in practice when conducting risk-based client KYC / CDD refresh

• How to conduct independent research and background checks on complex beneficiary ownership structures to identify and understand the associations and get a clear risk picture of the entity

• How to conduct third party due diligence, anti-bribery and corruption