Recent figures announced by HM Revenue and Customs (HMRC) at the end of 2022 revealed that dozens more estate agents have been fined for breaching anti-money laundering requirements.
A London firm received one of the most significant fines, more than £92k, for its AML failings.
The second wave of sanctions handed out to another 24 estate agents follows figures announced in October 2022, where HMRC named 68 estate agents, detailing fines totalling £519,645 for not complying with rules designed to stop criminals laundering money from illegal activity.
HMRC have made it clear that they are focused on clamping down on irregularities in the sector, and penalties will be imposed on those that do not comply with the AML regulations.
Read details here – Businesses that have not complied with the regulations 2022 -2023
Understanding risks and taking responsibility: Estate agency businesses
The property sector continues to be one of the most at risk sectors, and estate agency businesses (EABs) must take their responsibilities within this environment seriously to protect themselves and their clients.
While many EABs do not handle client money, their relationships with buyers and sellers of properties can provide crucial information to identify suspicious transactions.
Services offered by EABs are also attractive to money launderers because beneficial ownership can be hidden by corporate vehicles or overseas trusts. Commercial property may also provide legitimate income with which to merge illicit funds.
What are the AML requirements?
- To be registered with HMRC.
- Have a Money Laundering Reporting Office (MLRO) and a Nominated Officer (who may be the MLRO).
- Have a documented AML policy.
- Conduct Customer Due Diligence.
- Report suspicious activity.
- Maintain accurate records for AML audit requirements.
- Make sure staff are aware and trained in your AML policies.
Robust Policies Controls and Procedures
Keeping a regulated business within a compliant environment includes ensuring policies, controls, and procedures (PCPs) fit the company’s operating practices. A business that has not developed a robust approach to managing risk and compliance is in danger of investigations by the HMRC, fines, and sanctions. However, PCPs are only as effective as the staff implementing them, so merely setting them up is not enough. It is much more about fully understanding and putting responsibilities into practice.
Failure to comply with the Regulations can result in civil penalties or criminal prosecution, including prison sentences of up to two years and an unlimited fine. Senior managers and nominated officers can also be found personally liable for a breach of the Regulations.
Compliance Solutions for regulated businesses
If you believe your business may be at risk or wish to confirm your firm is achieving the required standard at AML & Compliance, we can help. 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. We work with businesses of all sizes, from the smaller high street or niche businesses to the large multi-office and multinationals.
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 needed.