New UK Government money laundering regulations
How to help prevent money laundering and terrorist financing if you’re an estate agency or property related business.
When the 4th Anti-Money Laundering Directive was introduced in 2017 it fundamentally changed the way businesses should handle money. Alarmingly, however, property professionals continue to place themselves and their businesses at unnecessary risk by overlooking the need to maintain robust checks and regular auditing of their AML procedures.
Despite making it clear to property professionals in the UK that they were actively monitoring the property sector, and would not hesitate to issue significant fines against individuals and businesses who failed to comply with anti-money laundering rules, HMRC found cause to issue nearly 1000 fines and penalties in 2018 against the sector.
The fines and penalties that HMRC issued for failures that related to non-compliance with anti-money laundering rules, highlight a strict position against those who knowingly or unknowingly take part in what is acknowledged to be socially and economically debilitating, criminal activity.
With the imminent arrival of the 5th AML Directive in January 2020, it is urgent that all property professionalsre-assess their identity checking procedures and ensure that they well informed and up-to-date with the approved regulations.
According to recognised guidance, the following steps represent the minimum or starting point towards compliance with AML regulations:
- Appoint a Compliance Officer who is responsible for the oversight of compliance, relevant legislation, regulations and industry guidance and who can assess and manage money laundering and terrorist financing risks to the business;
- Apply risk-based customer due-diligence procedures when assessing every customer and use enhanced due diligence if a customer presents a higher risk;
- Establish a system of identifying and reporting on any suspicions that highlight money laundering and or terrorist financing risks, both internally and to the relevant law enforcement authorities as appropriate;
- Store, maintain and back-up appropriate records for the minimum prescribed period (usually five years plus the current year);
- Provide regular training and awareness for all relevant employees on legal and regulatory responsibilities to ensure that you and your staff are alert to, and addressing money laundering and terrorist financing risks on a day to day basis;
Estate agents are particularly vulnerable as property continues to be an attractive conduit for high-end money laundering. Ignoring your obligations is not an option and ignorance is not a defence. Failure to comply with the regulations could be very expensive, possibly even career or business destroying for property professionals who do not take this message on board.