A genuine public policy issue, the TRACFIN framework aims to combat money laundering and terrorist financing (ML/TF). Given that the real estate sector is particularly exposed to these risks, real estate agents must comply with certain legal obligations allowing them to contribute to this mission.
TRACFIN real estate agent: What is the regulation ?
The objective of the TRACFIN framework is to enable real estate professionals to detect and report transactions involving risks so that they can be processed by the services of TRACFIN . Therefore, all members of the real estate agency (managers, employees and real estate agents) must engage to ensure the effectiveness of the framework by complying with certain rules.
What are the TRACFIN internal procedures ?
In the course of the exercise of his profession, every real estate agent will be confronted to the internal procedures TRACFIN .
The internal procedures, which must be implemented in all real estate agencies, refer to a document that presents and explains to the agency’s personnel the steps to follow in the risk detection process. The monitoring of internal procedures also allows the real estate agent to prove his compliance with TRACFIN regulations within his real estate agency.
These procedures are specific to each real estate agency and vary according to the type of structures to which the agency belongs (size, organization, sector of activity, clientele, etc.).
Each of real estate agent’s employees must be aware of these procedures and have them readily available.
Regarding the content of these internal procedures, it addresses various points, such as :
- designation of members within the agency: TRACFIN correspondent, TRACFIN declarant and internal procedures,
- customer identity analysis,
- risk mapping,,
- determination of the obligation of vigilance and each of its levels,
- suspicion report, etc.
In its capacity as a law firm specialized in advising real estate agents, AUMANS Avocats AUMANS Avocats supports its clients with regard to their TRACFIN obligations. The firm assists them with any questions, until the implementation of their internal procedures .
TRACFIN : What are the obligations of the real estate agents ?
To ensure the effectiveness of the TRACFIN system, each real estate agency involved in transactions must, in particular, ensure compliance with its LCB/FT obligations (countering money laundering / terrorist financing).
A complete LBC/FT risk assessment and management system must be formally established. It must be regularly updated in accordance with the evolution of the property law .
Under their duty of care, real estate agents must :
- Mapping the risks Specific to the agency according to its characteristics (nature of products and services, customer data…). These risks must be subject to regular updates.
- Train the teams To the TRACFIN framework. The real estate agent must ensure the updating of their knowledge and regularly inform their teams of changes to the framework.
- Formalize a procedure Detail a procedure that all real estate agency personnel must follow. This document will be communicated to the entire team so that the protocol can be followed throughout the client relationship.
- Designate a reporting party and a correspondent who will be responsible for communicating with TRACFIN services. The correspondent will respond to Tracfin’s requests and the reporting party will handle the suspicious transaction reports.
Ultimately, the law compels every real estate agent to carry out a notification of suspicion Where, in the event of a client or transaction being suspected of having a connection to money laundering or terrorist financing, this procedure is free and confidential. Neither the client concerned nor any third party is to be informed thereof.
The risks in case of non-compliance with TRACFIN reporting obligations
As the following recalls Code of Ethics for Real Estate Agents , all real estate agent must respect the laws and regulations in force in France. Real estate agents must therefore fulfill obligations of vigilance and declaration.
The National Sanctions Commission (CNS) may, after inspection of Directorate-General for Competition, Consumption and Fraud Prevention) impose sanctions in the event of non-compliance with the framework. This may include a simple reprimand, a warning or still a temporary prohibition from practicing the profession and monetary sanctions. These inspections are not uncommon.
Attention, a bank or notary’s intervention does not relieve the real estate agent of its duty of care and reporting obligations.The AUMANS Avocats is at your disposal to answer your questions relating to TRACFIN and, more generally, to advise you in this area. Our lawyers have been practicing for a long time in real estate law and offer a comprehensive support to real estate agents in the exercise of their profession.
