Armenia Bans Real Estate Registration Without Notary Due to Money Laundering Risks
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Loading... - Aiden Connolly
- 20 Nov 2024
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The Armenian parliament has approved an amendment to the Civil Code that mandates notary certification for all real estate transactions. This decision, finalized in a second reading on Wednesday, aims to combat the rising risks of tax evasion and money laundering associated with property transactions in the country.
Previously, the Civil Code allowed property transactions—such as sales and leases—to be registered with the State Committee of Cadastre without the need for notary certification, provided they were executed using standardized templates. However, the Armenian government has observed a troubling increase in suspicious transactions, particularly those registered as donations of real estate.
The statistics reveal a sharp rise in such transactions:
- 12,691 donations were recorded in 2020,
- 17,942 in 2021,
- 23,099 in 2022.
This trend has raised concerns within the Ministry of Justice, which suggested that many of these donations may actually be disguised sales aimed at evading taxes or laundering illicitly acquired assets.
To address these concerns, the new legislation stipulates that all real estate transactions must be certified by a notary. This requirement is intended to enhance the transparency and legitimacy of property dealings in Armenia. Notaries will also be obligated to report any transactions that raise suspicions to the Central Bank, further strengthening the oversight of real estate activities.
The amendment is expected to have several implications:
i. Increased Oversight: By requiring notary involvement, the government aims to create a more robust framework for monitoring real estate transactions, thereby reducing opportunities for tax evasion and money laundering.
ii. Enhanced Transparency: The involvement of notaries is likely to improve the transparency of property transactions, making it more difficult for illicit activities to go unnoticed.
iii. Impact on the Real Estate Market: While the new regulations may deter some fraudulent activities, they could also lead to increased costs and administrative burdens for individuals and businesses involved in real estate transactions.
iv. Strengthening Financial Integrity: The requirement for notaries to report suspicious transactions aligns with global efforts to enhance financial integrity and combat money laundering.
Armenia's decision to require notary certification for all real estate transactions marks a significant step in addressing the risks associated with property dealings in the country. By implementing these measures, the Armenian government aims to foster a more transparent and accountable real estate market, ultimately contributing to the fight against tax evasion and money laundering.
