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HMRC Anti Money Laundering Webinar Link and Summary

HMRC held a webinar last week on carrying out client due diligence in line with the Anti Money Regulations. This webinar covered important points such as who to check and when to carry out enhanced due diligence.

Below we have provided a summary of the main points as well as links to a recording of the seminar and record of the questions and answers from the participants.

Who should we carry out Customer Due Diligence (CDD) on?

During the seminar HMRC suggested that as ‘best practice’ as a selling agent you should check both sellers and buyers. However, they also confirmed that the legislation only states that you have to check your client. This is the person who signed your contract and as such in the case of the selling agent is the vendor.

Do we have to carry out CDD on lettings?

HMRC confirmed that lettings are not covered by the Money Laundering Regulations. They did thought suggest that if you are also involved in sales and so regulated, it is best practice to cover landlords as well. However, in line with the regulations you do not have to check Landlords

How do we carry out CDD?

Due Diligence is about ensuring that you know your client, that you can prove that you know them and that you are confident you have carried this out on all of the beneficial owners. HMRC confirmed that you can do this via approved ID and utility bills or via an electronic method. If using ID they confirmed that one form of ID is not enough. They also suggested you should carry out checks to ensure the documents are not fake, suggesting fake documents are surprisingly easy to get hold of.

Although HMRC said they cannot endorse one electronic method over another they suggested referring to your trade body if you have one.  Our solution was developed with industry stakeholders such as the NAEA and we are preferred suppliers to The Guild of Professional Agents, Relocation Agent Network and Auction House UK.

What is enhanced CDD and when should I carry this out?

Enhanced customer due diligence is required when, in line with your risk assessment and policy, a person or transaction is seen as high risk. Two specific examples they gave are where the person is selling remotely, so you will never meet them, or they are a Politically Exposed Person (PEP).

What should I do if I cannot complete CDD?

HMRC made it clear that if you cannot get sufficient information to complete your CDD then you should not enter into a business relationship with that prospective client.

What is a Politically Exposed Person (PEP) and how do I identify them?

A politically exposed person is someone involved in, or family member of someone who is involved in politics. They can be targets for those wishing to launder money given their power and influence. You can market a property being sold by a PEP but you need to carry out enhanced due diligence on them.

You can identify someone as a PEP by doing research online or if you use an electronic solution like ours, they will automatically be identified for you.

What if it is a company that owns the property?

You have to carry out due diligence on the company to establish name, country, company number, registered address and those behind the company. This is the beneficial owners, anyone who owns 25% or more.

What records need to be kept?

HMRC confirmed that you need to keep records for 5 years from the date the business relationships ends. For a selling agent, this is date of completion or the point at which the contract with the client is terminated.  These should consist of

  • Copies of checks and any accompanying notes
  • Diary of site visits
  • Contracts
  • Any internal reports
  • Staff AML training

What do we do if we suspect something?

HMRC confirmed you should report it to the National Crime Agency (NCA) which can be done via their website here.  Suspicious circumstances can come from your policies and risk assessments but include the client being unwilling to provide details or documents.

What affects your risk profile?

You must carry out a risk assessment to judge the level of risk to your business from money laundering and so then how you approach customer due diligence.  To analyse your risk you should look at your type of customers, your business relationships, the type of transactions you deal with and your geographical location.

A recording of the webinar can be found here

A record of the Q and A from the webinar can be found here
Compliance in a Box is our online solution developed with industry stakeholders such as the NAEA to relieve the burden of compliance, including Money Laundering Regulations. If you would like any further information please fill in the form or contact us on 01524 220013.compliance in a box

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