Estate agents fined for not complying with money laundering regulations

AML (Anti Money Laundering) and Compliance

A recent report from HM Revenue and Customs (HMRC) revealed that between 2021-2022 several estate agent businesses were penalised for breaching anti-money laundering requirements, with fines totalling more than £500,000.

HMRC names the 68 estate agents that have been fined a total of £519,645 for not complying with rules designed to stop criminals laundering money from illegal activity.

The fines followed the first prosecution of an estate agent for trading despite not registering with HMRC, to ensure compliance with money laundering regulations.

HMRC vows to continue investigating other cases of businesses failing in their AML obligations and those failing to register whilst trading. Businesses falling under the directive must take their responsibility seriously. Penalties can be severe, leading to prison sentences of up to two years and an unlimited fine.

Nick Sharp, HMRC’s Deputy Director of Economic Crime, said:

“We are determined to create a level playing field for businesses who play by the rules. That means taking action against the minority of businesses who fail to fulfil their legal responsibilities under the money laundering regulations.

“Money laundering is not a victimless crime. Our regulations are there to protect businesses from those criminals who would prey on their services to wash their dirty money.

“Serious and organised crime costs the UK billions of pounds every year and our anti-money laundering supervision is a vital tool in combatting that.”

HMRC is currently investigating a number of other cases of businesses failing to register whilst trading, which could lead to prison sentences of up to two years and an unlimited fine.

Businesses can check if they need to register for money laundering supervision on GOV.UK. They can register online for supervision on GOV.UK.

Anti-Money Laundering Guidance for Estate Agents

Purchasing property in the UK is a common method used by serious organised criminals to launder the proceeds of criminal activity. The sheer size of the property market in the UK and the high value of property assets means that extremely large amounts of criminal funds can be ‘cleaned’ in a single transaction.

Although estate agents don’t handle transaction monies, they are often the first port of call in a property transaction and so they are best placed to identify and verify the parties to a transaction and report any suspicious activity at the outset of the transaction.

Failure to comply with the Regulations can result in civil penalties or criminal prosecution. Senior managers and nominated officers can also be found personally liable for a breach of the Regulations.

Your anti-money laundering checklist:

1. Register with HM Revenue and Customs for anti-money laundering supervision.

2. Check that your buyers and sellers are who they say they are.

3. Put in place internal controls and monitoring systems.

4. Create a policy statement for your business.

5. Keep records.

Robust Compliance Solutions

At AML and Compliance, we offer a full range of services focused on ensuring businesses across all regulated sectors create, maintain and evidence their compliance with the requirements of their regulators and legislation.

Our Packaged services include:

AML Policy and Procedures including auditing and reporting

AML and Compliance Administration Management

These packages have been designed to provide a core compliance service to regulated businesses in the most cost-effective way to manage and control their AML and Compliance processes.

We adopt a sensible and pragmatic approach to fees, ensuring that we are competitive and always add value. As necessary we will agree on packaged services to control cost and enable clients to spread payments to alleviate cash flow, yet ensure services are provided when they are needed.

If you would like to discuss our services in more detail you can contact us on 0203 985 8553, email us or complete an enquiry form.

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