EPRS | European Parliamentary Research Service
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In Finland, a €3.5 million money-laundering case was reported concerning island purchases in the
south-west archipelago of Finland and under investigation.
Growing concern in Germany was reported in 2018, with a particular focus on Berlin, where prices
are fast increasing, causing concern for renters and potential buyers. This triggered consideration of
the idea of locking out foreign investors from Berlin real estate. There are a number of articles
reporting a link with illicit money and seizures of related properties, and cases reported and
investigated by the German financial investigation unit (FIU). The number of suspicious transactions
reported by real estate agents is also limited. Real estate had already been identified as one of a
number of
individual economic sectors carrying money-laundering risks. A recent report on real
estate money-laundering vulnerability provides an assessment of the magnitude of foreign money
of unclear origin laundered into German real estate in 2017 (about €30 billion) and a description of
the phenomenon.
Cases have also been reported by the press regarding Greece, while other specific features of the
Greek real estate market
show real estate prices can outweigh those outlined in the contract prices.
A study considered the housing sector as well as the professions involved as being at high risk of
money laundering. Golden visas also have a real estate impact, yet as such they are not linked to
money laundering. Some cases have been investigated in the context of residence permission in an
EU country.
In the Netherlands, a study Estimating money laundering risks shows that risks exist in real estate,
with few concrete examples being reported. There are reported cases relating to organised crime
and
massive investment in new or planned residential housing projects, as well as in restaurants,
through the use of private non-bank loans. In one older case, a real estate agency acting as a money
‘laundromat’ was
prosecuted (for laundering money of criminal origin on behalf of dozens of its
customers). Special attention to the growing influence of organised crime in the property market,
in particular its grip on property formally owned by non-profit organisations and/or associations,
has also been reported in the context of the seizure of illegally obtained assets.
In Portugal, the press and specialised reports
highlight the existence of money laundering
through real estate, with a link to the resident
permit programme and its requirement to invest
in the country. A number of beneficiaries of the
programme may have acquired properties using
laundered funds.
The issue has been found to be of particular
importance in the United Kingdom and in
particular in London. An inquiry
on foreign home
ownership was launched by London's mayor in
2016, with political
follow-up. A number of
reports provide a factual assessment of the role of
overseas investors in the London new-build residential market and on the true effects of foreign
investment on the UK property market. A July 2017 House of Commons Library briefing on Foreign
investment in UK residential property provides data on the scale of overseas investment in housing
and on property owned by overseas companies, and lists key issues associated with foreign
ownership.
As regards quantitative data, the 2015 Transparency International report on Corruption on your
doorstep and the 2017 Faulty Towers report provide an assessment of the scale of the problem.
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They refer to the data of a 2016 Business innovation and skill survey indicating that between 2004
and 2014, 'over £180m worth of property in the UK has been investigated by UK law enforcement
as suspected proceeds of corruption. Moreover, over 75 % of these properties use offshore
corporate ownership. This is believed to be the tip of the iceberg in terms of the scale of the proceeds
Golden visa
Citizenship by investment (CBI) and residency by
investment (RBI) schemes, often referred to as 'golden
visas', are national schemes designed to attract foreign
investment. Some of these
schemes offer residency or
citizenship rights in exchange f
investment, including real estate investment.
Concerns about money laundering arise when the
beneficiaries happen to be using illicit money for the
purchase of real estate.