Anti Money Laundering Regulations

Anti Money Laundering

On 26 June 2017 The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (more commonly referred to as the Money Laundering Regulations 2017) came into force in the UK. These regulations supersede the Money Laundering Regulations 2007 and subsequent amendments. We have been leading the calls for guidance and specifically clarity on sales agents' obligations to carry out customer due diligence (CDD) on buyers.

The legal obligations are designed to reduce the social and economic impact of organised crime and impede the transfer of money to support funding for terrorist organisations in the UK and around the globe. The regulations aim to ensure that companies have sufficient information to know who their customers are.

HM REVENUE AND CUSTOMS

HMRC took over supervision of Estate Agency Businesses from the Office of Fair Trading on 1 April 2014.

Under the Regulations, it’s an offence to trade as an estate agent unless you’re registered with HM Revenue and Customs (HMRC) for anti-money laundering supervision. You must register with HMRC if your business carries out any activity defined as estate agency work under Section 1 of the Estate Agents Act 1979.

HMRC also supervise business activities outside of estate agency businesses; read HMRC's guide "Money Laundering Regulations: who needs to register" to check if your business needs to register.

To register with HMRC as an Estate Agency Business for anti-money laundering supervision under the Money Laundering Regulations follow their registration guide.

HMRC Money Laundering Regulations 2017 Guidance

SUPERVISION – WHAT ARE WE CALLING FOR?

We are pleased that the new regulations allow scope for self-regulatory, professional bodies to supervise estate agents. Self-regulatory bodies are best placed to understand their own sectors and to gather information about developing risks and anti-money laundering methodologies. In discussions we have had with HMRC it is clear that they have very little understanding of developments in estate agency and the fringe areas of the sector, such as online estate agents.

Money Laundering Reporting Officer

There is a requirement under the Regulations to have a nominated person within your business to act as a Money Laundering Reporting Officer (MLRO) and a Deputy, where applicable. Alongside this, the new legislation requires a senior member of the management team to be appointed as being responsible for compliance with the regulations.

To make it easier for you to keep up-to-date with all the important legislation updates and any additional useful information, we are collecting details across our membership about who the MLRO is within your business. Complete the form below to give us details of your MLRO.

Download the form

We believe that alongside guidance on filling in a suspicious activity report, guidance from HMRC should include real life examples from estate agents who have given reports to the National Crime Agency (NCA), to illustrate the process and explain the steps required. This would help to better explain to staff and MLROs about how long the process can take and what the outcomes can be.

Increasing the Number of Suspicious Activity Reports (SARs)

Estate agency staff must raise an internal report where they know or suspect another person is engaged in money laundering (whether a transaction has taken place or not).

This report needs to go immediately to the MLRO who needs to assess whether there are grounds to pass to the National Crime Agency (NCA). The NCA will then determine whether the agent can proceed with the transaction.

We're working with the NCA to educate agents about when a Suspicious Activity Report is necessary and the consequences for failing to do so.

For advice about money laundering and how to report suspicious transactions, you can contact HMRC. If HMRC needs to contact you about anything confidential they’ll reply by phone or post.

HELPING YOU TO COMPLY

HOW TO COMPLY GUIDE

AML guide

Our guide will help you get to grips with your AML responsibilities. Ignorance is no defence! Download a digital copy from the members' area. Printed copies will be given exclusively to NAEA Propertymark Workshop delegates for free.

More info... 

PROPERTYMARK PASSPORT

Facial Recognition

Propertymark Passport uses biometric checks like those used at UK Border Control to support agents in assessing the authenticity of ID documents, regardless of their type or country of origin. 

More info... 

ONLINE COURSE

Business Skills

An online introductory course is designed to raise awareness of money laundering activities and reduce agency risks.

Book now

FOUNDATION COURSE

Training

A classroom-based course covering the latest developments such as Money Laundering Regulations and the Bribery Act.

Find dates

ADVANCED COURSE

Training

This course is designed for people with anti-money laundering duties within their firm such as the MLRO or Deputy MLRO.

Find dates

WORKSHOPS

Masterclasses

We're running workshops across the country to ensure that members understand their money laundering obligations.

Find a Workshop

OTHER RESOURCES

Form

AML & CTF Questionnaire

Helping members adhere to the highest standards. Principal, Partner or Director member firms need to complete and return to us.

Download

Form

Identity Verification Form 

This form is designed to help you to collect all the information you need regarding the vendor and the property or land to be sold.

Download

Document

Home Office ID Guidance

This Home Office guidance on examining identity documents will assist you in spotting forgeries and altered documents.

Download

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HMRC Webinars

HMRC regularly run and record webinars explaining what is expected of estate agents in relation to anti-money laundering

More info....

ECONOMIC CRIME INQUIRY

In April 2018, the UK Parliament’s Treasury Committee launched an investigation into how the country tackles crimes such as money laundering and terrorist financing, after reports that billions of pounds of criminal proceeds are flowing into British property.

We responded to the consultation arguing that despite a ramping up of compliance activity since the introduction of the Money Laundering Regulations 2017: 

  • Agents were not given sufficient time to adapt to the changes
  • Fines for those agents flouting the rules are not publicly being made known
  • Only interim guidance is available
  • There is a need for better guidance for reporting suspicious activity
  • The rules do not cover letting agents
  • There needs to more tools to help regulated agents understand enhanced due diligence
  • The public register of overseas companies owning property in the UK must be set up as soon as possible

UK NATIONAL RISK ASSESSMENT

In October 2017, the UK Government published the national risk assessment, the second comprehensive assessment of money laundering and terrorist financing risk in the UK.

The Financial Action Task Force (FATF), the global standard-setter on anti-money laundering and counter terrorist-financing has carried out a Mutual Evaluation (peer review) of the UK’s compliance with FATF’s standards and recommendations. Audits are carried out on each country every 10 years.

On 7 December 2018, FATF published their report concluding that the UK has a well-developed and robust regime to effectively combat money laundering and terrorist financing. However, the UK needs to strengthen its supervision and increase the resources of its financial intelligence unit. 

The report also outlined that while a significant number of high-quality SARs are received, the SAR regime needs a significant overhaul which would improve the financial intelligence available to the competent authorities.

Criminal Finances Act 

On 27 April 2017, the Criminal Finances Act was passed into law. The Act gives law enforcement agencies and partners new capabilities and powers to recover the proceeds of crime, and to tackle money laundering, corruption and terrorist financing. 

Registration of Overseas Entities Bill

The Government published the draft Registration of Overseas Entities Bill on 23 July 2018. The draft Bill sets out provisions to establish a new beneficial ownership register of overseas entities that own UK property. An Overview Document was published seeking views on how the Bill will be implemented. The draft Bill is expected to undergo pre-legislative scrutiny followed by a report to Parliament. The Government will then respond to the Committee’s report reflecting the responses to the Overview Document.

Our Work

We have engaged with the UK Government throughout the development of its proposals, including meeting with HMRC, the Home Office, HM Treasury and the Department for Business, Energy, Innovation and Skills (BEIS) to discuss how the Government’s Anti-Money Laundering and Terrorist Finance regime impacts on estate agents

We have held roundtable discussions with NAEA Propertymark members and representatives from HM Treasury, Home Office and BEIS to discuss views and provide evidence from the estate agency and property sector.

We are a member of the Money Laundering Advisory Committee (MLAC). This gives us a forum to work with and advise the Government, law enforcement, supervisors, and other industry representatives on how to operate an effective and proportionate Anti-Money Laundering and Counter-Terrorist Finance regime in the UK.