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) came into force in the UK. These regulations supersede the Money Laundering Regulations 2007 and subsequent amendments. NAEA Propertymark has 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.              

Propertymark’s guidance for members is currently being reviewed subject to HMRC revising their guidance to the sector.    

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 Guidance for Money Laundering Regulations 2017

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 Reporting 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.

How Can We Help You To Comply?

Guidance and forms

We are continually developing new ways to support agents to comply but our guidance is currently under review following changes to the regulations. We will make this guidance available again as soon as possible.

As part of our commitment to ensuring our members adhere to the highest standards, we have produced an AML & CTF Questionnaire which we would be grateful if all Principal, Partner or Director member firms could complete and return to us.

Our Identity Verification Form is designed for you to collect information regarding a property or land transaction. HMRC signpost agents to Home Office guidance on examining identity documents for help with spotting forgeries and altered documents.

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.

We're also working with a cutting edge US based Technology Company, that is part-owned by the National Association of Realtors, to develop an app which will support members with their anti-money laundering duties. For more information read the press release

Masterclasses

We are running Masterclasses across the country to ensure that members understand their obligations under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. Masterclasses feature top industry speakers and cover changes in legislation and current industry trends.

Find a Masterclass

Training

Financial Crime Update - Foundation course / 4 Hours CPD
Covering the latest developments such as Money Laundering Regulations and the Bribery Act

Find available course dates

UK National Risk Assessment

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.

Next year, the Financial Action Task Force (FATF), the global standard-setter on anti-money laundering and counter terrorist-financing, will carry 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. 

As part of the preparation for this, the UK Government has committed to publishing a second National Risk Assessment of Money Laundering and Terrorist Financing, ahead of the FATF Mutual Evaluation, which will commence in Autumn 2017 when the updated National Risk Assessment will also be published.     

In addition to this, in April 2016, the Action Plan for Anti-Money Laundering and Counter-Terrorist Finance was published by the UK Government. The Action Plan sets out the Government’s plan to stop money laundering and the funding of terrorism.

Furthermore, in October 2016, the Criminal Finances Bill was introduced in the House of Commons and subsequently the Criminal Finances Act was passed into law on 27 April 2017. The Criminal Finances Act 2017 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.  

The measures in the Act aim to improve cooperation between public and private sectors, enhance the UK law enforcement response, improve our capability to recover the proceeds of crime (including international corruption) and combat the financing of terrorism.  

We have engaged with the Government throughout the development of its proposals, including meeting with HMRC, 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.

We recently held a roundtable discussion with NAEA Propertymark members and representatives from HM Treasury and Home Office to discuss views and provide evidence from the estate agency and property sector against a comprehensive set of Money Laundering and Terrorist Finance risk factors.

NAEA Propertymark is 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.