AML Fines for estate agents published
13 March 2019 46619 Views
Estate agent anti-money laundering (AML) compliance is under scrutiny again following the publication of figures detailing the fines levied for AML non-compliance.
For the first time, HMRC have revealed £2.5m of penalty notices have been issued since the implementation of the 4th Money Laundering Directive in June 2017 across all sectors.
In its “List of businesses for tax year 2018 to 2019 that have not complied with the 2017 money laundering regulations” HMRC reveal the breaches include
failing to ensure policies, controls and procedures at group level
failures in conducting due diligence
failures in the timing of verification and proper record keeping
failures in carrying out risk assessments
And the scrutiny isn’t going away.
Despite greater engagement from the property sector, just 1% of all Suspicious Activity Reports were submitted to the National Crime Agency by estate agents and solicitors combined according to the latest figures covering April 2017 to March 2018.
2019 has seen the launch of “Flag it up,” the latest campaign to bring greater awareness of money laundering risk to the legal, property and accountancy sectors.
As with all compliance estate agents need to be documenting and evidencing their policies and processes.
The recent fines highlight critical failures by the agents identified in their procedure.
On a practical level you must have an Anti-Money Laundering Policy in place, which includes a risk assessment that outlines how you complete your Customer Due Diligence, what circumstances you would consider to be high risk, and how you would deal with those situations.
You must conduct due diligence at the appropriate time. For vendors this is before listing the property, for purchasers this is between offer acceptance and exchange.
You need to factor in both the individual(s) involved, and the circumstances surrounding the transaction. In most cases this is self-evident (up-sizing/downsizing/relocation/investment etc) but where the circumstances flag a risk, you will need to demonstrate how you have applied a higher level of due diligence.
Finally you must retain your records for 5 years from the end of the business relationship.
Compliance in a Box is the pay-as-you-go compliance toolkit for estate agents, with a range of electronic solutions that demonstrates a ‘risk-based approach’ to client verification alongside a full time and date-stamped audit trail.
Landmark customers get access to a range of training and template AML materials and for a limited time we’re offering 5 days of FREE AML training; no hidden fees, catches or obligation.
Until the end of March get 5 days of FREE AML training, sign up here: http://etsos.co.uk/5-days-of-aml-training/
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