A tech company in the compliance sector claims that 25 per cent of UK estate agency branches have failed to register with HMRC for money laundering supervision.
Thirdfort says just 16,730 UK branches out of 22,270 across the country have registered with HMRC, the anti-money laundering supervisor for the sector.
Some 5,540 branches - around 25 per cent - have yet to register.
Olly Thornton-Berry, co-founder and managing director of Thirdfort, says:“Money laundering is a serious and growing risk in the property sector and HMRC is hot on the heels of those agents that fall foul of their regulatory obligations.
“The failure to tackle money laundering has significant implications. Not only does it support criminal activity, but it leaves agents open to reputational damage, fines and even bans.“
Thirdfort claims that money laundering costs the UK over £100m annually and has been highlighted as a growing risk in residential and commercial property off the back of the Pandora Papers leak, last year.
A joint report in 2020 by HM Treasury and the Home Office assessed the risk of money laundering in the agency market as medium - elevated from its previous low category.
The report noted weaknesses in anti-money laundering and counter-terrorist financing controls, limiting the mitigations against the risk of money laundering in the sector.
Common failings included a ‘lack of bespoke policies, controls and procedures aligned with an appropriate risk assessment of each firm’s clients.’