Guidelines on AML/CFT for Real Estate Agents in Djibouti

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NATIONAL COORDINATION COMMITTEE
On the fight against money laundering and terrorist financing and the proliferation of weapons of mass destruction

18 July 2025
GUIDELINES
ON AML/CFT
FOR
REAL ESTATE AGENTS
IN DJIBOUTI
Table of Contents
CONTEXT AND DEFINITIONS................................................................................................................................ 3
MONEY LAUNDERING, TERRORIST FINANCING AND PROLIFERATION ...................................................................... 5

1. MONEY LAUNDERING..................................................................................................................... 5
2. Terrorist Financing .................................................................................................................... 5
3. Differences between ML and TF ...................................................................................................... 5
4. Proliferation Financing............................................................................................................. 5
   INTRODUCTION TO THE GUIDELINES .................................................................................................... 7
5. PURPOSE OF THE GUIDELINES................................................................................................................... 7
6. TARGET AUDIENCE................................................................................................................................................ 7
7. GOVERNMENT AUTHORITIES RESPONSIBLE FOR REAL ESTATE AGENTS............................... 7
8. SUPPORT FOR REAL ESTATE AGENTS FROM THEIR AML/CFT REGULATOR AND SUPERVISOR IN
   AML/CFT ............................................................................................................................................ 8
9. DEFINITION OF REAL ESTATE AGENTS. SPECIFIC ACTIVITIES SUBJECT TO AML/CFT............ 8
10. CLIENTS (SELLERS AND BUYERS) SUBJECT TO AML/CFT ................................................................ 9
    6.1. COVERED TRANSACTIONS..........................................................................................................10
    6.2. EXCLUDED TRANSACTIONS ...............................................................................................................10
    6.3. PROFESSIONAL VERSUS PERSONAL REAL ESTATE TRANSACTIONS .......................10
11. RISK-BASED APPROACH ........................................................................................................ 11
    8.1. COMPLIANCE SUPPORT................................................................................................................12
    8.2. RISK ASSESSMENT AND MITIGATION ..................................................................................12
    8.3. DIFFERENCE BETWEEN INHERENT AND RESIDUAL RISK ASSESSMENT......................................13
    8.4. DEFINITION OF ML/TF RISK......................................................................................................14
    8.5. IDENTIFICATION OF ML/TF RISKS...........................................................................................14
    8.5.1. RISK INDICATORS FOR CLIENT RISK : ..............................................................14

8.5.2. RISK INDICATORS FOR COUNTRY OR GEOGRAPHIC RISK :...............................16
8.5.3. RISK INDICATORS FOR ACTIVITIES, PRODUCTS, SERVICES, TRANSACTIONS : ...18
8.5.4. RISK INDICATORS FOR DISTRIBUTION CHANNELS : ......................................19
8.6. ELEMENTS OF ML/TF RISK ASSESSMENT .........................................................................19
8.7. QUANTITATIVE AND QUALITATIVE INFORMATION FOR ENTERPRISE RISK ASSESSMENT
D'ENTREPRISE..................................................................................................................................................19
9. THE AML/CFT PROGRAM, POLICIES AND PROCEDURES .........................20
9.1. SANCTIONS FOR NON-COMPLIANCE ...............................................................................21
9.2. ROLE OF SENIOR MANAGEMENT.....................................................................................................21
9.3. COMPLIANCE OFFICER ..............................................................................................21
9.4. WRITTEN POLICIES AND PROCEDURES..........................................................................................23
9.5. MAINTENANCE AND DISTRIBUTION OF AML/CFT PROCEDURES............................................23
9.6. GROUP COMPLIANCE.............................................................................................................23
9.7. STAFF VERIFICATION AND EMPLOYMENT..................................................................................24
9.8. AML/CFT TRAINING........................................................................................................................24
9.9. MONITORING AND REVIEW OF THE AML/CFT PROGRAM.........................................................................25
10. RISK-BASED CUSTOMER DUE DILIGENCE AT THE CLIENT’S END.................25
10.1. POLITICALLY EXPOSED PERSONS (PEPs)............................................................................29
10.2. CUSTOMER RISK ASSESSMENT AND CUSTOMER RATING...................................................30
10.3. THREE TYPES OF CUSTOMER DUE DILIGENCE..............................31
10.4. PROHIBITED CLIENTS AND RISK CONTROL........................................................................32
10.5. INABILITY TO COMPLETE CUSTOMER DUE DILIGENCE................................32
10.6. CONTINUOUS MONITORING OF NEW CLIENTS ..................................................................................33
10.7. RELIANCE ON A THIRD PARTY FOR CONDUCTING CUSTOMER DUE DILIGENCE
11. TARGETED FINANCIAL SANCTIONS.....................................................................................................34
12. EXTERNAL REPORTING - SUSPICIOUS ACTIVITY REPORTING. SUSPICIOUS TRANSACTION REPORTS (STRs) ..................................................................................................................36
12.1. HOW TO REPORT......................................................................................................................37
12.2. RECORD RETENTION .....................................................................................................39

CONTEXT AND DEFINITIONS

The threats of money laundering and terrorist financing extend beyond traditional financial entities that receive particular attention in the control of these activities.
International data suggest that the use of intermediaries is a means for criminals to create a false perception of wealth acquired legitimately.
Note: Real estate, legal, accounting sectors, business and trust service providers, etc., are known as intermediaries. They provide services and products that can be used to facilitate the entry of illicit funds into the legitimate financial system and may give an impression of respectability and normality. Recent changes to Djibouti's money laundering and terrorist financing legislation now include real estate agents in the AML/CFT system. It was necessary to regulate real estate agencies and other designated non-financial businesses and professions (DNFBPs) in order to protect them and safeguard the legitimate financial system from illegally acquired funds that could infiltrate it through these non-financial entities. Exponential growth has also been recorded in the number of real estate-related financial transactions. The real estate sector offers attractive assets to criminals or corrupt officials to launder funds acquired through criminal activities. Real estate agents and their sellers help clients carry out real estate transactions, which may involve significant monetary transactions, or facilitate the movement of large sums of money, sometimes across international borders. The real estate sector may also be involved in terrorist financing, as terrorist groups can buy or sell real estate. Due to the international nature of the real estate market, it is often extremely difficult to identify real estate transactions associated with money laundering (ML) or terrorist financing (TF). These guidelines have been developed in recognition of the ML/TF risks to which Djibouti's real estate sector is exposed and reflect international best practices; they are consistent with the main requirements of the 40 FATF Recommendations. The expected outcome is to ensure that real estate agents' operations and services are not abused by money launderers or terrorist financiers, and that real estate agents are aware of their obligations and responsibilities under the law. Note: FATF (GAFI) is an international financial action group established in 1989 to develop international standards for money laundering, terrorist financing and proliferation financing. FATF published a revised set of 40 Recommendations on ML/TF measures in 2012, which are continuously updated.

MONEY LAUNDERING, TERRORIST FINANCING AND
PROLIFERATION

1. Money Laundering
   a. Money laundering is defined as the act or attempted act aimed at concealing the origin of money or goods from a criminal activity. It is the effort to transform "dirty" money into "clean" money. The money laundering process often involves:
   (i) Placing criminal proceeds into the financial system, sometimes through techniques such as structuring foreign currency deposits in amounts that allow them to escape reporting obligations, or mixing legal and illegal corporate foreign currency deposits; (ii) Layering these proceeds by moving them through the financial system, often in a series of complex transactions, to create confusion and complicate paper trails; and (iii) Integrating the funds into the financial and commercial system so that they appear as legitimate funds or assets.

2. Terrorist Financing
   Terrorism is the act of seeking political, religious or ideological reasons to intimidate or compel others to act in a certain way.
   An effective terrorist group, like a criminal organization, is generally able to obtain funding sources and develop means to conceal the links between these sources and the use of funds. The required amounts are not always significant, and associated transactions are not necessarily complex. In some cases, persons accused of terrorism may commit crimes to fund their activities, and transactions related to terrorist financing may therefore resemble money laundering. As information evolves, the United Nations publishes lists of terrorists or terrorist organizations. Designated non-financial businesses and professions, including real estate agents, are required to keep up with this information and verify their databases against these lists.

3. Differences between ML and TF
   a. While money laundering concerns funds generated from illegal sources, funds used for terrorist activities are often of a legitimate nature. b. The source of funds is therefore not the only consideration for agents.
   c. The conversion of assets into money and the subsequent direction of that money must be observed.

4. Proliferation Financing
   FATF defines proliferation financing as "the act of providing funds or financial services that are used, in whole or in part, for the manufacture, acquisition, possession, development, exportation, transshipment, brokering, transport, transfer, storage or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including technologies and dual-use goods used for non-legitimate purposes), in violation of national laws or, where applicable, international obligations."

Proliferation of weapons of mass destruction can take many forms, but ultimately involves the transfer or export of technologies, goods, software, services or expertise that can be used in programs involving nuclear, biological or chemical weapons and their launch systems (such as long-range missiles).

INTRODUCTION TO THE GUIDELINES

These guidelines contain summary information and are intended to serve solely as general guidance.
They do not modify, cancel or replace the existing AML/CFT laws, regulations and directives issued in Djibouti.
They do not add new regulatory requirements for real estate agents either.
A "one-size-fits-all" approach does not work well for all real estate agents, so agents may need to exercise their own judgment as to what suits their organization and specific activity, if necessary.

1. PURPOSE OF THE GUIDELINES
   The purpose of these guidelines ("The Guidelines") is to provide advice to real estate agents in implementing and complying with AML/CFT legislation requirements.
2. TARGET AUDIENCE

Real estate agents (directly engaged in the purchase and/or sale of real estate. a. All real estate agents must determine whether they meet the definition of a real estate agent based on the above criterion and whether they provide or engage in the specified activities or services. b. If they decide that they are subject to AML/CFT, the Guidelines explain the AML/CFT requirements and how to implement them.
c. When Djiboutian companies have branches or subsidiaries abroad, measures must be taken to alert the management of these foreign branches to the prevailing AML/CFT requirements in Djibouti.
3. GOVERNMENT AUTHORITIES RESPONSIBLE FOR REAL ESTATE AGENTS

a) The Ministry of Urban Planning, Housing and Habitat is the designated AML/CFT regulatory and supervisory authority for real estate agents.

• This includes: i) private sector real estate agencies, and ii) government authority real estate agents.
• As the supervisor of real estate agents for AML/CFT, the Ministry of Urban Planning, Housing and Habitat expects real estate agents to be capable of performing the following tasks:
  ✓ Understand risks related to money laundering and terrorist financing;

✓ Know what to expect from the AML/CFT supervisor; ✓ Apply AML/CFT legislation to their business; ✓ Know AML/CFT compliance requirements; ✓ Know your customer; ✓ Recognize money laundering and terrorist financing red flags; ✓ Know where to obtain assistance; ✓ Submit copies of audits as part of their routine AML/CFT supervisory engagement.

b) Self-regulatory bodies / professional bodies, where applicable. c) ANRF is Djibouti's financial intelligence unit and is responsible for receiving and analyzing STRs. All real estate agents must submit STRs to ANRF when they identify a suspicious transaction.

d) The Ministry of Foreign Affairs and/or the Ministry of Interior publish Lists of prohibited organizations and persons under the AML/CFT law for foreign and national terrorism and TF designations, which must be consulted by real estate agents on each occasion of a real estate transaction involving them.
4. SUPPORT FOR REAL ESTATE AGENTS FROM THEIR
REGULATOR AND SUPERVISOR IN AML/CFT

a. The regulator and supervisor of real estate agents must provide general information and outreach activities as well as more specific support when a reporting entity encounters difficulties and has a genuine intention to comply. b. The regulator and supervisor of real estate agents must provide a wide range of information on how real estate agents can comply with AML/CFT legislation.
c. They will also inform real estate agents when new guidelines become available.
d. The AML/CFT supervisors of real estate agents are open to comments from reporting entities on what would be more useful.
5. DEFINITION OF REAL ESTATE AGENTS. SPECIFIC ACTIVITIES
SUBJECT TO AML/CFT. a) The definition of "real estate agent" generally includes sellers (brokers, traders), developers and builders whenever they execute a purchase or sale of real estate, participate in a real estate transaction as a real estate agent and conduct professional transactional activity to effectuate a transfer of real property. b) However, other professional categories may also be involved in activities involving the transfer of real estate, such as: LAWYERS / ACCOUNTANTS / NOTARIES / LENDERS, etc. (by merger or interaction of other professionals' functions), which brings them within the scope of AML/CFT regulation for DNFBPs and implicitly these guidelines. c) The definition of real estate agent is not limited to the private sector.

• All public authorities involved in the purchase and sale of real estate are subject to AML/CFT regulation for DNFBPs and implicitly these guidelines.
  d) AML/CFT requirements apply to the business as a whole, regardless of the number of sales employees. e) All sellers must implement real estate agents' AML/CFT policies and procedures. f) It is the responsibility of real estate agents to possess certain basic skills:
  ✓ The ability to identify potential ML/TF activity; ✓ Know what measures to take to mitigate potential risk; ✓ Know where to go for assistance in case of a potential threat; and ✓ Appreciate the commonality of money laundering and terrorist financing strategies and the fact that funds for terrorist activities often come from legitimate sources. ✓ Know how to report a suspicious transaction to ANRF g) Property managers providing property management or facility management services for owners and tenants respectively, and appraisers providing real estate valuation services are excluded, as they are not directly involved in the purchase and sale of real estate (i.e., transfer of title). h) Brokerage services are not subject to AML/CFT when they apply to rentals, rather than sales. i) If some real estate sector operators are unsure whether they are a real estate agent or if their activities or services are subject to AML/CFT, they should contact the self-regulatory body, where applicable, or the Ministry of Urban Planning, Housing and Habitat, or ANRF and/or request an independent professional opinion.

6. CLIENTS (SELLERS AND BUYERS) SUBJECT TO AML/CFT
   a) The purchase and sale of real estate generally involve the following parties:

• THE SELLER – real estate agents will apply AML/CFT from the outset;
• THE BUYER – real estate agents will apply AML/CFT as soon as the offer is accepted.
  b) Real estate agents must conduct customer due diligence on the seller before the exchange of contracts for the real estate transaction. c) Real estate agents must complete customer due diligence on the buyer before the exchange of contracts for the real estate transaction.

d) Real estate agents do not need to conduct customer due diligence on a party to a real estate transaction who is not their client, unless they conduct an occasional transaction with them.

• The term "occasional" does not necessarily mean "single"; it also includes circumstances in which multiple transactions are so intermittent or infrequent that no business relationship is established.
• When a person conducts an occasional activity or transaction through a real estate agent, the latter must comply with AML/CFT legislation (including STR submission) in relation to that person.
• Thresholds for occasional transactions vary depending on the situations and are listed in the relevant AML/CFT regulations.
  ✓ A situation in which an occasional transaction occurs is where real estate agents receive funds from a party to a a real estate transaction who is not their client for an amount of .... DJF (the relevant threshold is found in the prevailing applicable AML/CFT legislation) or more in cash.
  6.1. COVERED TRANSACTIONS

a. AML/CFT regulation applies to the transfer of ownership or long-term lease for :

• land,
• residential and commercial buildings,
• house/villa/townhouse, apartment,
• other benefits derived from anything attached to the land, for example industrial or commercial production [such as: factory, warehouse, office, mining, agriculture]
• real estate located abroad,
  via a financial transaction. b. Even if the real estate is located abroad and the title transfer takes place abroad, if real estate agents provide brokerage services for the sale or purchase of that property, the transaction will be subject to AML/CFT regulations.

6.2. EXCLUDED TRANSACTIONS

AML/CFT regulation does not apply to transfers...