The Cash Buyer Who Won't Say Who He Is
Sara, a sales agent, is handling a BD 420,000 apartment purchase. The buyer, 'Mr Hassan', insists on paying the full amount in cash in three instalments and refuses to provide a passport, saying his ID is 'with his lawyer'. He wants the sale registered in his cousin's name. He arrives with a different companion each visit and becomes irritated when Sara asks about the source of funds. On the second visit he offers Sara BD 2,000 'for her trouble' if she keeps the paperwork simple. The developer is pressing Sara to close quickly because the project needs cash flow.
1. Apply a risk-based AML/CFT approach: what red flags exist, what is Sara's obligation, and can she proceed if the buyer never provides identification?
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Red flags (cumulative, not isolated):
- Cash payment of BD 420,000 in instalments - large cash settlements are inherently higher risk and unusual for property at this value.
- Refusal to provide identification and evasive explanations about where it is.
- Purchase to be registered in a third party's name (cousin) - possible nominee or beneficial-ownership concealment.
- Changing companions and reluctance to discuss source of funds.
- An offer of BD 2,000 to 'keep it simple' - a bribe offer and a strong indicator of concealment.
Sara's obligations:
- Customer due diligence. She must identify the buyer and, where a third party is the registered owner, identify that person and the beneficial owner. No verified ID means CDD cannot be completed.
- Source of funds/wealth. She must obtain a credible explanation and supporting evidence for cash of this size.
- No tipping off. She must not tell the buyer she is filing a report or that his behaviour is suspicious.
- Reporting. The combination of factors - especially the cash, the nominee request, and the offered payment - warrants an internal suspicious transaction report to the compliance officer, who decides on external reporting.
- Refuse the payment. Accepting BD 2,000 is itself a criminal and disciplinary exposure.
Can she proceed? No. If CDD cannot be completed, the relationship must not be established and the transaction must not proceed. The developer's cash-flow pressure is irrelevant to this legal obligation.
2. The developer tells Sara to 'just take the cash and worry about paperwork later'. How should Sara respond, and what should she document?
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Response to the developer:
- State plainly that she cannot accept cash without completed CDD and a documented source of funds, and that proceeding would expose both the developer and her to criminal liability and licence risk.
- Decline the BD 2,000 offer in writing if it is repeated; do not accept it 'to hold'.
- Escalate to the developer's compliance/MLRO function and to her own supervisor so the pressure is on record.
- If the developer overrides her, she should not sign or process the transaction and should record the instruction.
Documentation:
- A dated file note of each visit: who attended, what was said about ID and source of funds, the cash instalment proposal, the nominee request, and the BD 2,000 offer.
- Copies of any documents received and a note of what was requested and refused.
- The internal STR and the compliance officer's decision.
- The developer's instruction, in writing if possible.
Key principle: the obligation to conduct CDD and report suspicion is personal and cannot be delegated away or waived by a commercial instruction. Silence toward the buyer is essential - no tipping off.