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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | February 2024
The money laundering and terrorism financing risks concerning real estate are well-documented. As the Financial Action Task Force’s (FATF) July 2022 Guide on the risk-based approach to the real estate sector notes, real property as an asset creates the ideal conditions for the movement of large amounts of funds between intermediaries and entities, spanning multiple jurisdictions. The scope for real property to appreciate is also a desirable trait for criminal actors laundering the proceeds of crime.
Jurisdictions such as the UK impose anti-money laundering and combating the financing of terrorism (AML/CFT) requirements on the real estate sector and professionals. The impetus to do so arose from the various risks real estate transactions present to the UK economy, including:
The UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) set out what relevant businesses must do to prevent their services being used for money laundering and impose AML/CFT obligations on:
Noting the legal and regulatory requirements, firm’s operating in the real estate sector should continue to maintain adequate and robust AML/CFT controls. An October 2022 Decision Notice issued by the Financial Conduct Authority against a bank offering services which primarily focused on real estate highlighted several key AML/CFT compliance takeaways relevant for firms operating in the real estate sector:
If you have any questions in relation to the AML/CFT risks impacting the real estate sector, including implementing policies and procedures to assist legal and regulatory compliance requirements, please contact either of the authors.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Publication
On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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