Impact of Anti‐Money Laundering Enforcement on Suspicious Activity Reporting—Empirical Evidence From Real Estate Agencies in Norway

This paper examines the impact of anti‐money laundering (AML) oversight on suspicious activity reports (SARs) filed by real estate agencies in Norway. Using unique data on inspections, sanctions, and confidential SARs, the study estimates the effects of inspections on reporting through a difference‐in‐differences approach. The results show an increase in reporting post‐inspection driven by entities with a low, positive number of prior filings, while report quality remains unchanged. There is no evidence of spillover effects; inspections do not influence the reporting of uninspected entities either geographically close to or affiliated with inspected ones. The findings suggest that AML oversight may create a learning effect for inspected entities but does not lead to sector‐wide improvements beyond local effects. This paper contributes to the modest empirical literature on AML oversight effects and the general literature on regulatory enforcement and provides recommendations for improvements to the AML system.