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Agents hit with hefty fines for non-compliance of AML

Tuesday 23 January 2018

Estate agents are being fined significant sums by HMRC for non-compliance under new anti-money laundering and anti-tax evasion regulations.

In 2017, HMRC issued more than 880 fines and penalties to all sectors for failing to comply with anti-money laundering rules. Estate Agency Businesses were among those that were penalised, although HMRC have not confirmed how many specifically went to agents nor the size of the penalty they have been made to pay.

Stricter regulations were introduced last year which now require agents to conduct anti-money-laundering checks on both the buyers and sellers of properties.

Additionally, agents have been forced to ramp up compliance measures after being subject to the Criminal Finances Act, which introduced the new criminal offence of failing to prevent tax evasion and additional tools to investigate suspected money laundering and terrorist financing.

Speaking to Business Insider, NAEA Propertymark Chief Executive Mark Hayward highlighted that despite recent changes, the property sector still remains largely unregulated, and without minimum standards, the industry is vulnerable to criminal activity.

This comes as the UK government launches a new watchdog to strengthen the defenses against money laundering and terrorist financing. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will work with all the UK’s Anti-Money Laundering (AML) supervisors to ensure organisations meet the high standards set out in the Money Laundering Regulations 2017, and has powers to investigate and penalise those that do not.

The Economic Secretary to the Treasury, John Glen, said: “This new watchdog will deepen the government’s partnership with the private sector as we work together to tackle illicit finance whilst minimising the burdens on legitimate businesses. This sends a clear message to criminals and terrorists that their dirty money is not welcome here.”

Launching OPBAS is the latest step in the government’s commitment to reform the AML regime, building on wider work including enhancing law enforcement’s powers through the Criminal Finances Act and updating the Money Laundering Regulations to implement the latest international standards, both of which took effect in 2017. 

Mark Hayward, Chief Executive of NAEA Propertymark commented:

“All estate agents must be registered with HMRC for anti-money laundering purposes and are required to adhere to its systems and procedures. HMRC are making spot and random checks among agents, and failure to comply with anti-money laundering regulations will result in substantial fines. Due to the remit within which HMRC operates, it is currently unable to make public the names of those who have been fined, and the value of such fines.”