Why Real Estate Remains a Magnet for Dirty Money

In this episode of Integrity Insights, Filip is joined by Michael Hornsby and Elisabetta Marinoni, researchers working with Transparency International and the Anti-Corruption Data Collective (ACDC), to discuss their new study: the Opacity in Real Estate Ownership (OREO) Index.

The conversation explores how opaque real estate ownership structures enable corruption and money laundering, why data and legal frameworks both matter, and what their assessment of 24 jurisdictions reveals about global weaknesses in this sector.

Key themes discussed:

Why real estate matters for financial crime

Real estate remains a preferred vehicle for laundering illicit funds. High-value transactions and the ability to hide behind corporate structures make it attractive to corrupt actors and criminals.

What the OREO Index measures

The index evaluates 24 jurisdictions, including G20 economies and major financial hubs such as Hong Kong, Singapore, Panama and the UAE.
It assesses two pillars:

• Data – the availability, completeness and openness of property and ownership data.
• Legal framework – the strength of AML rules governing real estate transactions and professionals.

The biggest loophole: missing beneficial ownership data

Most countries do not collect beneficial ownership information when property is registered.
This means properties can be owned anonymously through companies, especially foreign companies, making it extremely hard for authorities or journalists to trace real ownership or identify patterns of suspicious acquisitions.

Cross-border gaps and obstacles for investigators

Foreign companies can often buy property without any local presence, meaning no local BO disclosure. Investigators must then rely on the rules—and cooperation—of the company’s home jurisdiction, which is often limited or opaque.

Cash purchases and absence of gatekeepers

Some countries allow property purchases in cash and do not require involvement of notaries or lawyers.
This bypasses banking-sector AML controls and removes an important oversight layer.

Uneven AML obligations for real estate professionals

While most countries extend AML requirements to real estate agents, developers and lawyers are often excluded, creating entry points for money laundering.
In some jurisdictions, lawyers can even refuse to submit suspicious transaction reports due to client-privilege provisions.

Weak supervision and fragmented oversight

Supervision is often fragmented across many bodies—Germany, for example, has over 300 supervisory authorities in the non-financial sector—making consistent enforcement difficult.

How jurisdictions compare

• South Africa ranks high on paper, but enforcement gaps remain.
• Germany scores well legally but poorly on data transparency.
• Singapore and Hong Kong perform relatively well, though Hong Kong maintains weaker BO rules.
• The UAE scores poorly, reflecting high anonymity and the “open door” model that has historically attracted illicit funds.

Future outlook: risks of backsliding

Despite years of debate, there is still no global consensus that beneficial ownership transparency in real estate is essential. 

Read the full report here: https://www.transparency.org/en/publications/opacity-in-real-estate-ownership-index-2025 

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Transcript

 Alright, Michael Elizabeth, welcome on the podcast. Thank you very much. Great to be here. Thank you, Philipp. Nice to be here. Um, I invited you guys to discuss a report that you recently published titled Opacity in Real Estate Ownership Index. We have a couple of couple of those reports here in front of us.

Uh, before we dive into the, into the topic, I think everyone is familiar with the Transparency International, but I think not necessarily. With the anti-corruption data collective, can you maybe, uh, lose a couple of words on, on this initiative? Absolutely. Yeah. So, uh, the anti-Corruption Data Collective, or A CDC was founded in 2020 as a way to bring together the different sets of skills and expertise that are really needed to do impactful data-driven research and investigations into corruption, kleptocracy, illicit finance, um, and the.

The harms that those things cause in the world, particularly to, to our politics, to, uh, to the planet and to human rights and human security. So we bring together academic experts, uh, investigative journalists, policy experts, and we yeah, work together to exploit public or private data sets too. Achieve our goals of data-driven investigations and research.

Transparency International is one of the founding members, and they're a great example of the expertise and skill sets that we can draw on. And the advocacy that we can draw on to try, try, try and create change with the work we're doing. So, so you work very closely together, transparency International and A-A-C-D-C as you call it?

Yeah, absolutely. So across, uh, this project, the Oreo Index, uh, but also quite a few other reports, looking in depth at real estate or a particular sector in a given country, um, will work together on those reports. And on a, like a very, you know, general level, why, why do you think it's important to. Uh, measure such, uh, indicis.

Um, well, uh, um, investigations after investigations, immediate reports showed that real estate, uh, is still a vehicle that is mostly used by corrupt individuals and, uh, criminals around the world to launder their in, in gotten gains. Um, so that was, uh, the. The main, uh, reason. And uh, when we started thinking about how to develop this, uh, index, we asked ourselves like, uh, which are the, uh, kind of ways or solution to tackle, uh, the opacity around this sector and like to make these, uh, like the real estate sector less.

Vulnerable to these kind of, um, crimes. And, uh, we came up, uh, with these, uh, two pillars. Uh, then the index is composed of, um, on one side we have the data pillar and the other side we have the legal, uh, one. So, uh, we think that, uh, in order to, as I said, to tackle, uh, the, uh, vulnerability of the sector, you need on one side.

Um, uh, open, available and complete data, uh, ecosystem. Uh, and on the other side, you really, you also need to have, of course, uh, a strong and robust, uh, and comprehensive most of, uh, anti-money laundering framework. So hence the importance, uh, of these two pillars. And you, you looked at the, uh, if I'm not mistaken, 27 countries, right?

Why did you choose those countries specifically? Uh, I think it's 24, but it's um, okay. 24. Sorry. The starting point was the G 20. So we covered the GG 20 apart from Saudi Arabia and the EU as a whole, but we do include, um, some European countries, uh, that are frequently part of EU discussions like Spain and Norway.

Um, and then we added a selection or a sample of. What we think of as offshore financial centers, so Hong Kong, Singapore, Panama, and the UAE, because we wanted to see how those jurisdictions real estate sector aligns or matches up with their. Maybe more secrecy friendly, um, or the risks that we see in their financial sectors.

Um, but as we will see when we get into the results, it's quite a, uh, a mixed bag in terms of how they perform on the index. It isn't necessarily, uh, what you might expect. A lot of the time their performance is actually comparable with the, the G 20 economies. So speaking about the results, uh, I mean this is obviously like a very big question, but, uh, is there a way to kind of briefly summarize like your main, main findings?

So I think the first thing to say is no country or jurisdiction is getting tens across the board here, right? There's no perfect score. The one of the things the index does is define the ideal framework, both on the data side, but also on the A ML framework side. So. It sets up what we see as the ideal standard, and there's no country that we looked at that is really achieving that.

There is a very mixed bag in terms of, you know, some being stronger on the data side, some being, uh, stronger on the legal framework side, um, and a lot of variation and kind of fine tuning, let's say, within those countries. Uh, but generally there are a lot of loopholes that we see. So across the board, um, there's nearly always, I think in every country.

A few areas that stand out as being a gap in the way that the legislation is written, the way that it's implemented or in the data framework that creates an opportunity for dirty money to enter the real estate sector, avoiding the scrutiny that could be there if that gap or loophole was closed. Do, do you think, by the way that this is, uh, intentional or, uh, just like a lack of, you know, maybe, um, foresight.

That's a great question. I think, uh, we have to assume good intentions on the, on the behalf of policy makers. I think they're trying to, uh, put in place a framework that, uh, that works and is effective. There are international standards as well that set some guidance for this. Um. From what we can tell, often it's just in the, the actual implementation and matching that those standards and that guidance to the situation in that given country where these gaps appear.

Um, there may also be cases where the authorities aren't particularly interested in closing those gaps. There are some countries where we see that, uh, secrecy in this sector. Um. Isn't really being tackled, even though there's plenty of evidence and plenty of opportunity to do so. So it's a mixed bag. I think in general, we'd assume looking particularly at this selection of countries, that the, uh, you know, they've all signed up to, uh, the.

To international standards through the G 20, um, or through their FATA evaluations. And they've, you know, they've shown good intentions, but there are still gaps that appear for sure. Is it, is it possible maybe to, like when you say, you know, there are certain countries where they, they just don't really prioritize this to regionalize this, to think of this in terms of regions, you know, there are there some parts of the world where we can say that in general, this is not really like a priority.

I wouldn't necessarily say so, but I think there's been a lot of focus on, uh, global north destinations of illicit finance flowing into the real estate market. Also in the journalism and in the research and investigation from civil society actors, um, I think there's increasing awareness of how these risks also manifest in the global south, in particularly tourist hotspots.

There's really interesting research, um, are presented by some academics, uh, recently where they were looking at exactly this question and they identified similar in a way to the Oreo index that the variety between ways that real estate markets work in different contexts. Creates different gaps and loopholes that aren't necessarily covered by the international standards and their implementation.

Mm-hmm. International. And you mentioned the, those loopholes that you, you see across the board. What are the kind of like the main, main loopholes that you've identified? Um, so I think that one of the, um, main loophole that we identified is that, um. Uh, beneficial ownership information is not, um, collected in most of the countries.

Um, and when I say most of them, it's really the majority. We just found a couple of countries that actually collect this kind of information. This means that, uh, when you want to buy a property and register that, uh, the you, you are asked about the legal owner. So in case you're buying the company, the, sorry, the property through a company, you will put down the name of the company, but no, ma, nobody is gonna ask you.

Okay. But who is ultimately behind this, uh, company? Um, so this is a very important loophole because, uh, nowadays, uh, we, uh, showed that, uh, properties, real estate properties can be held anonymously. And, uh, these of course, uh, remains a really big incentive. For money launderers who want to, uh, put money into the real estate sectors is not, um, just the high, uh, value transactions that the real estate estate sector allows you to do in one time.

But it's also what makes it attractive is that, um, uh, you can help company in an so, um, it's really be concerning. So, so Elizabeth, if I understand this correctly. Basically from like a perspective of, of journalists or investigator who are trying to like find out who owns places, apartments, houses, uh, this means that, uh, since this is not a, this is not mandated that you have to disclose beneficial owner, the only way to find out is that if the country has a beneficial ownership registry that is accessible.

To everyone, and then you can like look at the legal entity that bought the apartment and then go, but this is not always the case, right? Yeah, it's not always the case. And this is actually a very interesting question because it raised, it raises another problem, which is, uh, first of all, the data is not always, uh, interop, repairable.

So this, uh, reasoning that you are, uh, correctly saying might work for one entity if you're interested in one entity. But if, let's say a journalist or um, Ms. Civil society organization in interest is interested in defining and drawing out a partner or a pattern on like, um, I don't know, like looking at a multiple properties owned in a very specific country.

Um, you can't do that because, uh, data is often not open. And the other side is that, uh, we found that, uh, in the countries we assessed doing so in 24, uh, jurisdictions, uh, I think around, uh, a couple ju had, uh, been as. Right now, a beneficial ownership register opened to the public. So even if you retrieve the name of the company owning a real estate property, sometimes you are not, you just stop there because you, you don't have access to beneficial ownership information held in another register.

So, I mean, this, this is, this is a very interesting point and I just, it just made me think of a, you know, I have this example, like, I, I, I, I come from Prague, which is a very, like, it's a very hot real estate market. And there is this kind of, like, this perception, I feel like among, among people when I talk to, you know, family members or friends, a lot of people say, you know, that's all the, because the prices have been, you know, skyrocketed, skyrocketing recently, and there is this perception that it's all b it's all like Russian oligarchs, uh, buying these places.

Uh, but essentially there is no way to, to find this out, right? Because as you just said, you, you, there is no way to like mine data. From these registries to kind of establish some patterns? Right. Excuse me. I think one of the challenges and one of the loopholes that we see is that in a lot of jurisdictions, a foreign company doesn't need to have a domestic presence where it would then be required to dis disclose its beneficial owners.

So if a foreign company is able to buy property in a country without having set up a local entity or. Declared as beneficial owner to the authorities in that country. That creates this gap where you then have to hope that you can trace it back to the country of incorporation and their, uh, beneficial ownership transparency regime, which, which these, these gaps and these steps all create obstacles and opportunities where the.

Not just journalists and civil society investigators, but also the authorities themselves can run into to problems of, you know, mutual, uh, legal assistance requests that go unanswered or take a very long time, or just inability to work with partners where there's perhaps a relationship like say between the EU and Russia, where mm-hmm.

It's very difficult to get that information outta the authorities there. So if not impossible. So, um, what we see is that. The, these are the kinds of loopholes that appear and just kind of become obstacles to scrutiny. And when we're talking about the data frameworks, it isn't simply the openness and ability of the public to engage.

The first thing that we look at is are the authorities themselves collecting all the information that they need to, to conduct their own investigations? If, for example, there's a suspicious transaction report flagged by an obliged entity. That isn't necessarily the case across all these countries. There are some where you can avoid registry in a transaction or your ownership of a property with the authorities in their register altogether.

So those countries tend to score pretty poorly because we say that, look, if there's a way where you can hide that information or keep that information from the authorities than whatever else you're doing, and however beautiful your register is, and however much access people have to it, it doesn't.

Really work very well because there isn't the complete information there in the first place. There are these other gaps as well, so. Uh, in some countries you don't need a third party to validate a transaction such as a notary, uh, or a lawyer. So there's a kind of oversight gap that that creates. Or you can use cash, you can operate outside of the banking system, so you avoid the other a ML controls that exist within finance is this, is this, uh, a lot of countries where you can pay in cash.

Uh, I believe so. I think that you might have this more at the top of your head, but that, yeah. Yeah. So like we didn't really directly look at, um, like the means of payments accepted to for real estate transactions in the index. Uh, but when we found out that in some countries, uh, like Michael was rightly say.

Saying before, uh, you don't need a regulated professional to certify the transactions. We kind of, uh, looked a little bit more into which, uh, countries, uh, like a sample of countries that, uh, because if the payment still needs to go through a bank, then at some point you will have some kind of control because the bank still needs to do some checks.

Mm-hmm. The problem is with countries that allow, uh, real citizen's actions to happen in cash. And we found, for example. Um, Australia and Russia, this can happen. So, uh, Australia and Russia are two countries that, uh, you don't need a third party to validate transactions like a lawyer or a notary that finally certified that the transaction happened.

Uh, and you can, uh, buy property in cash. So that means that I can come to you, just give you a bunch of, uh, cash and the property is mine. Um, we are not saying that this is a common way, uh, like of launder money. Um, like the fact that, uh, it's not like there is not evidence that the fact that there is no third party control is a big loophole, uh, used yet, but it's a loophole that can be potentially used and of course it get, gets risky if, uh, the transaction can happen in cash.

And how about, uh, like, uh, these mediators, you know, like real estate agents and, uh, developers, do they ha do they have some sort of, uh, face some sort of regulations. Um, so it's a really interesting, uh, question. The straightforward answer is yes. We found that, uh, 22 out of 24 countries that we analyzed in the report, uh, kind of extend some kind of, uh, obligations, the two countries that don't at the time of writing the report.

Um, uh, where it's. South Korea and, uh, Australia, although Australia, uh, already in 2024, passed the legislation that will include, uh, um, some professionals. I think it's gonna be effective in 2026. Um, but coming back to the ones that do extend some kind of obligations, uh, if we look closer, we found that, um, some, uh, categories.

Of, uh, professionals are not included in these obligations or that in some, uh, some cases these obligations are not, uh, implemented, uh, easily. Um, let me give you an example of that. For example, one of the, uh, main funding is that real estate developers are often not included, don't have any anti money laundering obligations, even if, um, they can sell real estate properties or housing projects.

And, uh, this was the case in seven countries. So if you think about like seven countries, also 24, it's a, a pretty high number and creates a very important loophole. Mm. Um, and the same line, uh, when I was talking about like uneven implementation, we see the, uh, legal professions, uh, in some jurisdictions like, like Canada and Brazil.

Um, legal lawyers and, uh, legal professionals are extended from, uh, uh, are not included in the national. Anti-money laundering, uh, legislation. For example, in Brazil, um, the, the Bar Association was supposed to give, uh, some obligations to, uh, lawyers, but uh, it never happened. And, uh, in Panama, uh, we have the example that, um, lawyers can abstain from reporting suspicion transactions because of the client privilege, which is applied also for high risk services, like setting up a company or even.

Buying a property. This is, uh, this leads me to my next question, which is the question of enforcement. I know that you didn't really like, uh, focus on this that much in your report, but, uh, I found interesting. You have this example of, I think, uh, Germany where there are over 300 different supervisory bodies, which sounds like a complete nightmare.

Can you like elaborate a little bit, a little bit on this? Yes, we looked at supervision as the fourth component of our legal pillar because it's extremely important that these obligations don't remain on paper, that they are actually checked and see if they are actually applied. One of the main findings in the, this component, as you are rightly saying, is that, um, supervisions in, uh, um, many country, I mean Germany was the extreme example, but it's.

Uh, oftentimes fragmented and so supervisory responsibilities are, um, spread across, uh, multiple, uh, entities and, uh, uh, other, yeah, supervisory authorities. It's not, Germany was not, uh, an isolated case. Also, Brazil have, uh, different, um, ki has different kind of, uh, supervisory bodies. Um, so yeah, that was one of the main finding.

The second one is that, um, in, uh. Um, some countries, uh, supervision is still, uh, entrusted to self-regulatory bodies, uh, which is kind of, uh, risky because of, uh, it raise of course concerns about like client, uh, um, um, conflict of interest. Of course. I mean, if you, uh, if the bar, if the association of your own profession is called to, uh, kind of regulate and impose sanction of their, on their.

Peers. Um, it raised a question of how are you actually doing that without, yeah. So it was another topic. Okay. That raised concerned the supervision. And, and then on this, on this point of German, I mean, since this is where we are, as far as I know, uh, no publicly, like the. Property records are not publicly available, right?

That's right. Yeah. So that is a major weakness in the system, but it's still, but it's still ranked really high. Yeah. So. That, uh, lack of data openness is a major weakness in the German system, but the, one of the reasons I think for its good performance on the index is that it's one of only four countries in the entire sample that covers all of the professionals who can participate in real estate transactions with the anti-money laundering legislation.

So for the majority of countries where there's some kind of gap in that coverage that reduces their. Entire score across that part of the index, because from the get go there's a professional category of professionals who you could work with to purchase real estate and avoid, um, triggering. Reporting requirements in Germany, that's, that doesn't appear to be the case.

So it's strong in that sense, but weaker on the data side for sure. And supervision as better was saying, is very fragmented. And that's, um, a significant obstacle to a smooth investigative process to, uh, to look into cases and hold people to account. And the, the country that, as far as I remember is ranked the, the highest is South, South Africa.

And the, which one is, was the worst? Uh, South Korea, I think. South Korea. Okay. So it's the south countries. Is is it, like, is there a, is it like a huge gap between those two in terms of, you know, all the indicators that you measure? Yeah, actually it's, um, in the index it's Australia. Um, uh, the is right at the bottom, but as beta was saying, because of the new legislation coming into place on.

Paper. Uh, that'll change pretty soon. Um, it is a really significant gap. I think the difference between how these laws are written in the different countries and the data that's available, um, makes an enormous difference if you're trying to look into this sector and makes a big difference to the professionals who are working in it.

I think it is important when we talk about South Africa and actually any country in the index to. Mentioned that we are only looking at the legislation as it's written, not how it's implemented, so, um, or not how it's followed and, and enforced. So there are examples from South Africa that really create organizations like Open Secret, South Africa.

Have reported and documented where you have people linked to kleptocratic regimes across Africa, buying South African real estate and doing so successfully bypassing the, uh, the checks that are there at the point of transaction and later appearing in investigations by law enforcement or civil society that are triggered through some other means.

And that speaks to this point of, um. Making these systems work and bringing up the numbers of suspicious transactions that are being flagged by professionals in the sector, which I think is a kind of perennial challenge for fis. But it also speaks to why we look at the data part. Because what we see is that when we have that open data, when we're able to look as independent actors, then we can identify those cases, but also see the loopholes and see the gaps.

So that we can flag those up to the authorities and say, look, this is clearly a problem, or You are very good on paper. Legislation is falling down because of these two or three points that we see being abused time and time again. And that feeds into the civil society advocacy that can help kind of bring, uh, bring these numbers up basically.

Mm-hmm. So it's, this is part of why we wanted to look at both parts because it isn't just what the authorities can do with the data that they have, but how we, as civil society actors, academic researchers. Can get involved and identify by looking at scale, what the, the situation is within the sector.

Mm-hmm. And then, uh, one, one more question, uh, I found interesting that you had in the dataset several, like global financial centers, such as, I think there's the UAE, Panama, Singapore, Hong Kong. Uh, how do they kind of, uh, rank and do you see like similarity similarities between those countries? So they do fare surprisingly well, I'd say in the index.

Um, uh, although on closer inspection, I think what you see is that they, they actually have quite different business models, right? So, um, Singapore performs very well in the index and we see that Singapore is this, you know, major finance hub. For the region and takes quite a strong interest in keeping criminal elements in check.

Um, similar in Hong Kong, although it has a weaker, beneficial ownership disclosure and identification system. So maybe there's a greater level of comfort there with anonymous companies and therefore their real estate holdings within Hong Kong. Um, the UAE performs pretty badly in the index, and that's very consistent with.

What seems to be the business model there as this offshore hub where it's kind of all services, everything included, low tax, uh, high anonymity, and that extends to the real estate sector. There have been leaks of real estate ownership from Dubai. That show a real kind of, uh, who's who of criminal underworld and corrupt characters purchasing real estate there often.

Um, yeah, very anonymously. And there are cases that, um, you know, are in the news at the moment. Like this huge seizure of crypto from the uk. I think it was 5 billion pounds, about 6 billion Euros. Um. And the fraudster behind this scheme through an associate successfully bought real estate in the UAE and it was actually their attempt to buy it in London by some multi-million dollar mansion.

Um, that tripped the SAR reporting requirements from lawyers and then the police got involved in the case. So it also shows how real estate becomes a bit of a choke point for all kinds of illicit crime and activity where a country that's well set up to combat this. Can be protect itself from these kinds of criminal elements, whereas a more doors wide open policy mm-hmm.

Um, obviously becomes very attractive. If I may add to what please, Michael, Michael said that, uh, they all have something in common that is, that the data pillar scored less than the legal one. Um, and this talks a lot about what Michael, the, the point that Michael was making before, I mean, you can have. Uh, legal, uh, framework that is really strong and robust.

But like if, uh, your data is not open, if you're not allowing other actors in public, uh, watchdog to check what you're actually, uh, doing, who is holding the properties that you have in your country and raise suspicions transactions that you're just half. Way through, uh, prevent, uh, money, uh, dirty money to enter your economy.

So I think it's also a very, um, important point to raise. Mm-hmm. I'll ask you one more question before they, before they kick us out. We, I think we only have three minutes in this place, but we are recording, but it's, it's a very, like a broad. General question. Uh, maybe you have some thoughts on it, because I have seen, I remember recently I interviewed this, uh, researcher in the US that he was, where he was talking about how, you know, like all this, uh, all these, uh, anti-corruption laws are being kind of like scaled back, uh, across the European Union.

We have been seeing, you know, like, uh, the closures of transparency, UBO registries. So the trend is not really like. In our favor, like from our perspective as like anti-corruption practitioners, uh, do you see a similar trend in, in terms of, you know, transparency in this field and real estate? Or what do you, how do you kind of foresee the future?

Um, I think, uh, that, um, what's, um, missing still, uh, in general in the global discussion is a consensus around the importance of, uh, uh, beneficial ownership data on real estate. And, uh, uh, um, yeah, I hope that, um. You know, this will change in the upcoming years. We have the six anti money lau directive that might address this in the EU a bit, but yes, it's concerning that we still, after all the discussions that were held in international for and um, so on, that this, uh, topic didn't reach a consensus yet.

So I think if we don't even get to that, it's um, yeah. So it might be a concerning future. And I think where we do see quite strong and clear international standards around a ML legislation for the real estate sector and other non-financial entities, uh, the. Framework or the broad consensus about the data availability and going back to the basics of what's collected in what circumstances is information collected.

There isn't such a strong international agreement around that, and that dovetails very much with what BET has saying about beneficial ownership, but it also extends further into the real estate sector in general. So, um. I think there's maybe less of a, a rollback scenario as we are seeing in, uh, in terms of beneficial ownership, but there isn't, um, perhaps as much, uh, to roll back actually in terms of real estate, in terms of getting the, uh, the clarity about.

What's going on in the sector there. Interesting. Well, thank you very much, Elizabeth, uh, Michael, for your time. I really appreciate it. This has been a fascinating conversation and maybe we'll do a, uh, uh, an update when there is some significant developments in a couple of years. Thank you. Of course. Thank you, Philip.

Thank you.