ABSTRACT

Money laundering is a term used to describe a scheme in which criminals try to disguise the identity of, original ownership, and destination of money that they have obtained through criminal conduct.

The term money laundering started to draw attention in the early 90s and it has long been used by criminals like robbers, real estate agents and owners. The real estate sector has to do with investments of buildings, land and real property, fraudsters have been using the real estate sector as a medium to launder money which was gotten illegally to now look legal. With the continuous development, the real estate sector has become the most suitable ways for money launderers to launder money in and it poses a threat to national development and international security. The main objective of this work is to examine the mechanism which exist to combat money laundering in the real estate sector of Cameroon. In order to achieve this, this work adopts the qualitative research methodology. The work reveals that in order to repress the practice of money laundering in the real estate sector, the state has put in place laws and institutions but the problem lies in the proper implementation of these measures. The work therefore strongly recommends that for money laundering to be effectively traced in the real estate sector, there should be more effective and efficient institutions put in place to combat the practice of money laundering within the real estate sector in Cameroon.

CHAPTER ONE

GENERAL INTRODUCTION

This chapter seeks to unravel the historical evolution of money laundering and the real estate sector in Cameroon through the background to the study, raise problems in the research statement of the problem which will unravel research questions and objectives using a particular methodology.  This chapter is also going to review the literature and equally highlight the gaps in the literature used in the research and also provide justifications, significance, and scope for the study, define key terms and end with the synopsis of chapters.

1.1 BACKGROUND TO THE STUDY

Money laundering at its core is the proc3ess by which criminals disguise the origins of illegally obtained money, making it appear as though it came from a legitimate source. The practice has a long history, dating back to ancient times when merchants would disguise the origins of their wealth to avoid taxes or to bypass trade restrictions. In the morning era, money laundering gained prominence during the prohibition era in the United States [1920-1933]. Organised crime syndicates, such as the Italian Mafia, laundered vast sums of money earned from bootlegging through various legitimate businesses, including real estate investments. Real estate being a high-value and relatively stable assets, has always been an attractive avenue for money laundering. Properties can be purchased using illicit funds and then sold at a later date, providing a seemingly legitimate source of income[1]

With the advent of globalization in the late 20^th century, money laundering, became an international issue. Criminal organizations started using complex financial networks involving offshore banks ,shell companies, and trust to obscure the origins of their illicit funds . The real estate sector being an integral part of the global economy, became increasingly vulnerable to money laundering schemes . Criminals would purchase properties using dirty money and then sell them at inflated prices, effectively cleaning their illicit funds . This practice not only distorted property markets but also had broader implications for financial stability and security.

Reorganising the growing threat of money laundering, governments around the world began implementing stricter regulations and enforcement measures. The Financial Action Task Force [FATF][2],an intergovernmental organization, was established in 1989 to combat money laundering and terrorist financing.

Despite these efforts, money laundering in the real estate sector continues to be a persuasive problem. Sophisticated criminals have adapted to regulatory changes by employing new techniques, such as using crypto currencies to facilitate illicit transactions. Additionally, lax enforcement and oversight in some jurisdictions have allowed money laundering persist[3]

In conclusion, the historical evolution of money laundering and its relationship with the real estate sector highlights the need for continued vigilance and cooperation among governments, financial institutions, and law enforcement agencies. Addressing this complex issue requires a multifaceted approach that combines regulatory reform, technological innovation, and international cooperation[4]

During the 1930’s , during the period of Prohibition in United States , laws against money laundering were enacted to combat organized crime . Prohibition provided a significant boost to organized crime as well as a large source of new funds obtained from illegal alcohol sales. The successful prosecution of tax , evasion shifted the emphasis of the state and law enforcement agencies on tracking and confiscating money , but existing laws against tax evasion could no longer be used once gangsters began paying their taxes [5]

The issue of money laundering came to the surface following incidents like the Panama reports, the paradise newspapers, Swiss leaks and other journalistic investigations, which highlighted the part played by offshore entities in global money laundering programmes, which raised global voices for the conceptualization and implementation of effective counter money laundering programmes. Money laundering is the process of conversion of illicit funds to look like it was gotten from a clean source. The Historical evolution of money laundering in the real estate sector in Cameroon

The Cameroonian economy began to grow, and with it, the demand for real estate. The sector experienced rapid growth, and many properties were purchased with foreign currency, primarily from oil-rich countries.

2000s:

The real estate sector in Cameroon faced significant challenges due to the rise in criminal activities. Many real estate investments were found to be tainted with proceeds from drug trafficking, arms smuggling, and corruption. The Cameroonian government initiated various anti-money laundering (AML) measures to combat this issue[6]

2020s

In response to the COVID-19 pandemic, the Cameroonian government introduced economic stimulus measures, such as the launch of a Real Estate Fund, which aimed to promote economic growth and infrastructure development. The funds raised were expected to be utilized for legitimate purposes. However, there were concerns that these funds could be used for money laundering.

Despite these measures, the issue of money laundering in the real estate sector in Cameroon persists. To combat this problem, the government must continue to enhance its AML and financial regulations[7] Moreover, law enforcement agencies and financial institutions must work together to ensure compliance and reduce the risk of money laundering in the real estate sector

Money Laundering usually involves a series of multiple transactions used to mask the source of financial assets so that these assets can be used without compromising criminals seeking to their use. Money laundering can happen through various intermediaries; bank transfer both by wire and check, are the most common channels for illicit money transfers. Money laundering has several devastating effects ;it damages financial sector institutions that are critics for economic growth, promoting crime and corruption that slow economic growth ,reducing efficiency in the real sector of the economy .Money laundering is a problem not only in the world’s major financial markets and sea centres but also in emerging markets . Cameroon has criminalized money laundering in line with the United Nations convention against corruption which was signed on 10^th October, 2023, and ratified by the president of the Republic on 6^th February,2006. Cameroon follows an all crimes approach to money laundering whereby all offences under the laws and regulation OF Cameroon constitute predicate offences .In order to effectively combat money laundering ,institutions have equally being put in place to combat .

1.2: STATEMENT OF THE PROBLEM

Money laundering is a serious threat; it underpins criminality and terrorism and can even jeopardize economic stability. Detecting and halting this kind of activity, and preventing it from occurring in future, are top priorities, but this is not realistic in Cameroon. The state of Cameroon has ratified several treaties indicating measures member states must take to combat money laundering. The state of Cameroon however does not respect its obligations under the international human rights treaties, making it difficult to combat the illness. The problem here is the lack of proper implementation of these laws and equally, the issues of lack of independence of the judiciary.

1.3: RESEARCH QUESTION

1.3.1: MAIN RESEARCH QUESTION;

How effective is the real estate sector regulated in Cameroon to combat money laundering.

1.3.2: SPECIFIC RESEARCH QUESTIONS;

What is the concept of real estate sector and money laundering?

What are the legal and institutional frameworks regulating the real estate sector to combat money laundering?

What are the effective measures to regulate the real estate sector in Cameroon to combat money laundering?

What are the policy recommendations?

1.4 RESEARCH OBJECTIVES

1.4.1 MAIN RESEARCH OBJECTIVE

The overviewed objective of this work is to examine the effectiveness of the regulation of the real estate sector in combating money laundering.

1.4.2 SPECIFIC RESEARCH OBJECTIVES

To examine the concept of real estate sector and money laundering.

To evaluate on the legal and institutional frameworks put in place to combat money laundering in Cameroon.

To assess the evaluation of the effectiveness of the regulation of the real estate sector in Cameroon to combat money laundering

To examine the various summary of findings, conclusion and recommendation.

[1] 2001 Foreign Policy Magazine [http://foreignpolicy.com]and Nigel Morris-Cotterill[www.countmoneylaundering.com].

[2] ‘’Money Laundering in the Real Estate Sector ,’’Financial Action Task Force,2017

[3] Organized crimes and Money Laundering ,Federal Bureau of Investigations,2018

[4] Levi Michael. ‘’Money Laundering “. The Oxford handbook of Organized Crime. Oxford University Press, 2014.

[5] Williams, Phil. ‘’Dirty Money; the Evolution of Money Laundering.

[6] ‘’Corruption and Money Laundering in Cameroon,2000s

[7] Capacity building for Anti Money Laundering in Cameroon,”UN Development Program 2021.