Property transactions being monitored for money laundering

 

Colonel Kyaw Thein Win, deputy chief of the FIU, said it was difficult to trace money entering the market because there are many unlicenced real-estate agents in Myanmar and the association governing them lacks the powers to police its members that similar associations have in other countries.  

Nonetheless, he said, “real estate agents have the responsibility to report transactions to the government and they will have to report transactions in excess of Ks 100 million to the FIU”. 

Although the sale of a land plot at Ks 100 million would not be unusual it still must be reported because if an individual made five sales of the same amount at the same time it would be “suspicious”, Kyaw Thein Win said. The FIU will focus its investigations on these cases, he added. 

Even if the appropriate taxes are paid on the transaction the FIU is interested in the source of the funds. “We want to know where the money is coming from,” Kyaw Thein Win said.

Khin Maung Than, chair of the Myanmar Real Estate Service Association, said that the black money flowing into the property market was not going through association members. “We are loyal to the state. I can guarantee that the massive inflow of black money is not through real estate agents. The money launderers do it in cooperation with secret brokers,” Khin Maung Than said, noting that the association had only received its official permit from the Ministry of National Planning and Economic Development a little more than two years ago – in June, 2012. 

The secretary of the association, however, was confused about what had to be reported to the FIU, saying: “It is not clear whether the real estate agents have to report both the selling and buying to the FIU.” 

The association secretary also thought the FIU was investigating for tax payments. “According to the FIU, realtors must report the inflow of money into the market. In the past, the government collected a 37 per cent tax on all property sales, but now the new tax rate is 35 per cent, including the stamp tax … I think it is a bit different than what the FIU said,” the secretary said.   

Aye Lwin, joint-secretary (1) from the Union of Myanmar Federation of Chambers of Commerce and Industry, said earlier that half of all foreign money flowing into Myanmar was going into the real-estate sector.

FIU officer Thurein Aung said that it would file charges against those who broke the Anti-Money Laundering Law and that property could be confiscated, but that this could only be done by the courts.

The FIU has investigated share sales of Asia Green Development Bank and that a report has been sent to the President’s office, but no further information has been released. It has also said that it is investigating five cases in which black money may have been laundered through property transactions.