The Money Laundering Regulations 2007 requires that businesses at risk of being used for money laundering by criminals and terrorists have measures in place to minimise the risk of this happening.
The estate agency sector has been brought under the spotlight following Channel 4’s documentary From Russia with Cash and the former Prime Minister’s tour of South East Asia in 2015 where he said foreigners mustn’t be able to buy UK homes with laundered cash to help the global effort against corruption.
The Government’s clear policy is that businesses’ (including estate agents) approach to money laundering and terrorist financing should be risk-based.
Propertymark has created guidance for members which covers the Money Laundering Regulations (2007), the Proceeds of Crime Act (2002) and the Terrorism Act (2000), has been formally approved by HM Treasury. If members fall foul of the rules they could face a Propertymark disciplinary process which could involve expulsion and a fine of up to 5 million euros.
Download anti money laundering guidance
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 2007 follow their registration guide.
We believe that HMRC and self-regulatory bodies should be appointed supervisors of estate agents and letting agents. We would advocate professional bodies acting as the self-regulatory body for their members and HMRC would remain as the supervisor for agents who are not members of these bodies.
We feel that self-regulatory bodies acting as supervisors 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.
There is also 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.
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.
We have a form that can be downloaded that asks for the company legal name plus the title, name, address, email and telephone number of the Money Laundering Reporting Officer plus the Deputy.
Download the form
To help estate agents we think the guidance from HMRC should include examples from estate agents who have given reports to the NCA and the outcome to better explain to staff and MLROs about how long the process can take and what happens if the report is acted upon or not.
Under the rules estate agency staff must raise an internal report where they know or suspect another person is engaged in money laundering and report to the MLRO as soon as possible, who is to then file the information with the National Crime Agency if they feel there is enough suspicion or knowledge to suspect money laundering, even if no transaction has taken place.
The business must then seek consent from the NCA before proceeding with a suspicious transaction or entering into arrangements.
We're working with the National Crime Agency to improve the number of Suspicious Activity Reports that are logged from the estate agency sector. Visit the National Crime Agency website for more information about reporting suspicious activity.
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.
A new anti-money laundering directive passed by the European Parliament in May 2015 is due to come into force within the next two years with the aim of stepping up the fight against money laundering and terrorist financing.
Despite the UK’s decision to leave the EU on 23 June, the Government have confirmed that until exit negotiations are concluded, the UK remains a full member of the European Union and all the rights and obligations of EU membership remain in force.
The Directive introduces two key differences in relation to the estate agency sector. Firstly, the potential professional and self-regulatory body supervision of estate agents and secondly, estate agents could be understood to include letting agents. Read more...
Both NAEA Propertymark and ARLA Propertymark believe that letting agents should be regulated under the Fourth Money Laundering Directive. They both also think that HMRC and self-regulatory bodies should be appointed supervisors of estate agents and letting agents. Read our response to the consultation...
In October 2015, the Government published the UK’s first National Risk Assessment for Money Laundering and Terrorist Financing. It identifies and assesses the UK’s money laundering and terrorist financing risks.
In April 2016, the Action Plan for Anti-Money Laundering and Counter-Terrorist Finance was published by the UK Government. Later that year, in October, the Criminal Finances Bill was introduced in the House of Commons with the aim of improving the Government’s ability to tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing.
We have engaged with the Government throughout the development of its proposals, including meeting with the Home Office, HM Treasury and the Department for Business Innovation and Skills (as it was called until July 2016) to discuss how the Government’s Anti-Money Laundering and Terrorist Finance regime impacts on estate agents.
As well as the money laundering guidance for our members we have also created an Identity Verification Form to assist you in collecting important information regarding a property or land transaction. If you would like some more guidance HMRC have been suggesting agents view the Home Office's guidance on examining identity documents for help spotting forgeries and doctored documents in terms of Anti Money Laundering.
HMRC regularly run webinars explaining what is expected of estate agents in relation to anti money laundering, check for upcoming dates or watch the previous webinar here.
Join us at our Masterclasses around the country to keep members aware of any changes in legislation, to discuss current industry trends and to invite top industry speakers to present.
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Financial Crime Update - Foundation course / 4 Hours CPDCovering the latest developments such as Money Laundering Regulations and the Bribery Act
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