Land deal searches to halt money laundering

The incidence of money laundering through land transactions needed to be made more public, said Pham Sy Liem, vice president of the Viet Nam Construction Association.

Liem suggested agencies launch a website to connect all real estate companies and trading floors, with daily transactions made public and available on the net.

Liem made his comments on Circular 12 on the implementation of the Government’s Decree 74 on real estate business activities.

He said some suspicious activities were occurring. For instance, in Ha Noi many villas and houses were left unused. Authorities needed to track down the owners and ask some questions. If no transparent information was found, it may indicate they were used for money laundering.

Certainly there were inconsistent transactions. But how to determine that the buying price was not consistent with market prices and which authorised agencies would be involved in evaluating the transaction prices remained a big question.

Some countries that had fair regulations could advise agencies to counter tax evasion and combat laundering.

Specifically, all transactions should be reported to local authorities. If the selling price was too low, the authorised agencies would have the right to purchase the property, which would mean a loss to the seller. This would prevent sellers from setting an unreasonably low price.

In addition, real estate trading floors or real estate companies also had their separate interests, so they may not strictly comply with the reporting requirements. Therefore, authorities must actively collect information.

It was difficult to detech money laundering, Liem said. An individual could buy around 5-7 real estate properties at the same time. Authorised agencies had to investigate to find out whether the finance was coming from illegal business activities.

“We can’t fight money laundering if we just sit still and wait for their reports,” said Liem.

Source VNS

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market