Following a rise in applications for anti-money laundering (AML) supervision from businesses that do not have the necessary risk management procedures, HMRC is contacting estate agents to remind them of their responsibilities.
In short, estate agents that apply to register for AML supervision with HMRC must have documented risk assessment, policies, controls, and procedures (RA/PCP), or have them in place 21 days after application. HMRC will reject applications from businesses that have not done the necessary preparation.
The regulator hopes the reminder will encourage compliance with the AML regulations and ensure no registration delays. It’s a criminal offence to trade as an estate agency business without being registered with HMRC.
The Money Laundering Regulations 2017 require anyone who engages in estate agency work to ensure adequate procedures to anticipate and prevent money laundering and counter-terrorist financing.
Estate agents must ensure they have a comprehensive written AML policy statement, as well as any supporting policies, documents, and procedures. These must be relevant, up-to-date, and correct to anticipate and prevent money laundering. Staff training is also required to ensure employees understand and implement these policies.
The requirements cover things such as:
- Customer due diligence (with an emphasis on client ID checks)
- Source of funds and source of wealth checks (where appropriate)
- Suspicious activity reporting.
Depending on the severity, a failure to meet AML compliance obligations can lead to fines, a prison sentence of up to two years, reputational damage, and even closure.
Understanding and meeting all the necessary AML requirements can be a real challenge for many businesses. But, without robust compliance, estate agents are likely breaking the law.
At Legal Eye, we provide outsourced audits and reviews to help estate agents understand the regulations and industry requirements and adapt their processes and procedures accordingly. Get in touch today to learn more about our Estate Agent AML Support Services and how we can help.