The government introduced the Fifth EU Money Laundering Directive into UK law just before Christmas - and it has a significant implication for agents.
It was introduced as part of The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 and comes into force in two weeks time in January 10 2020.
This is an amendment to existing regulation but has several new amendments.
One such change says that wherever possible businesses must use electronic verification for their anti-money laundering checks rather than just looking at paper-based documents such as passports and driving licenses.
According to one PropTech supplier in this niche, this means the estate agency sector will need to implement these changes immediately while letting agents will also be affected, when letting out a property where the rent is €10,000 per month or more.
Other sectors to now fall under the regulations include financial advisers, art dealers and crypto-currency exchange platforms.
Failure to comply with the regulations can result in prosecution and heavy financial penalties.
Martin Cheek, managing director of SmartSearch says: “The Fifth Money Laundering Regulations coming into law may well catch a number of people by surprise ... It comes into effect on the 10th January, so companies will not have long to prepare.
“It is the need for electronic verification that is likely to take most people by surprise. Any estate agency or letting agents who do not already have a trusted means of doing this will need to implement this immediately to ensure they are compliant and save themselves from a heavy fine.
“The regulations are designed to help tackle rising levels of fraud and eliminate money laundering, things that are likely to be a key priority for everyone this year.”