Did You Know? Handling Foreign Buyers Almost Always Triggers Enhanced Due Diligence (EDD)

💡 Did you know that real estate agencies in Costa del Sol are often required to conduct Enhanced Due Diligence (EDD), not just simple KYC?

Because Costa del Sol attracts a large number of foreign buyers, the money laundering risk is higher, meaning EDD is often mandatory.

Why Foreign Buyers Require More Scrutiny

📌 Non-mortgage purchases – Many international buyers purchase real estate without loans, which increases the risk of illicit funds.

📌 High-risk jurisdictions – Many buyers come from countries with weak AML enforcement or high corruption levels.

📌 Corporate structures – Properties are often purchased via trusts, offshore companies, or complex financial structures.

📌 Politically Exposed Persons (PEPs) – Real estate is a common way for PEPs to hide illicit wealth.

Example Case: The PEP Who Wanted to Buy a €2M Property

A luxury real estate firm in Marbella received an inquiry from a wealthy buyer from Eastern Europe looking to purchase a €2M villa—without a mortgage.

🚨 Warning Signs:

❌ The buyer was a Politically Exposed Person (PEP), increasing AML risk.

❌ The funds came from an offshore corporate account with no clear business activity.

❌ When asked about source of wealth, the buyer’s lawyer provided vague explanations.

🔍 The agency’s mistake? They conducted a basic KYC check instead of a full EDD review, nearly completing a high-risk transaction without proper controls.

✅ The Lesson? If you handle foreign clients, high-value properties, or corporate buyers, EDD is NOT optional—it’s a legal requirement.

📌 CostaAML helps real estate agencies correctly apply EDD and avoid compliance risks.