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Queries raised over 'two-tier' AML system for agents and developers

An industry expert has questioned the fairness of a “two-tier system” that has emerged between new builds and second-hand homes when it comes to anti-money laundering (AML).

Under AML rules, estate agents are required to verify the identities of sellers and property buyers must provide ID once an offer is accepted.

But Tim Barnett, chief executive of AML platform Credas, has questioned why the same rules don’t apply for developers selling new builds.


Credas analysed Energy Performance Certificate data for the past 12 months and found 209,393 were issued for new builds.

Barnett warns this means almost a quarter of a million new-build buyers potentially haven’t been properly checked by housebuilders when selling a property each year, which could be an attractive loophole for criminal gangs, sanctioned oligarch and even terrorist organisations.

He says: “Of all the new homes built and sold each year in the UK, none are subject to AML checks by the housebuilder selling them? Yes, the lawyers for each purchaser will do their AML checks I’m sure. 

“However, doesn’t this two-tier system make you wonder why, if house builders are exempt, estate agents are compelled to shoulder their own separate AML burden - after all, agents do not handle the cash? 

“The government can’t have it both ways - it’s either important at the point of sale and purchase as in the case of estate agents listings and offers, or it’s not - as seemingly in the case of new homes developers.”

Barnett claims this loophole could be worth on average £367,200 each time in missed AML checks.

Barnett adds: “This makes for a frankly astonishing and wholly unacceptable gap of £76.9bn in money laundering opportunity for criminal gangs, ISIS, sanctioned oligarchs and the like.

“I find it incredible that the UK government has allowed this gaping chasm of unlawful funds fiddling to remain open. 

“Our research suggests that Britain is the second most prolific country on the planet for money laundering activity. 

“When looking proportionally at the estimated amount of cash laundered in each country as a factor of gross domestic product, Britain at 4.3% is fourth in the rankings below Belgium, Luxembourg and Israel.

“I humbly suggest that politicians might bring themselves to closing this new homes sector disparity if we as a nation want to be able to hold our heads up high amongst others on the world stage rather than resembling a nation that seemingly does not care.”


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