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HMRC Update on Anti Money Laundering Regulations

19th May 2015

HMRC have now confirmed that agents should establish who the beneficial owners are of any property for sale. Once this has been done the agent should then take the necessary measures to confirm and verify their identity. It is important that agents have a process and audit trail in place to be able to demonstrate that both these steps have been taken.

This confirmation has come following a recent HMRC agent audit. Although HMRC will not comment on any specific cases they have provided general guidance at our request which can be found below:-

“With regards to your enquiry, I cannot speak specifically about the advice that may or may not have been given  to a third party. I can confirm that  under the Money Laundering Regulations 2007 Part 2 it details the meaning of customer due diligence.  I will detail below this extract to assist you in understanding what is required.

Part 2

5. “Customer due diligence measures” means-

(a) identifying the customer and verifiying the customer’s identity on the basis of documents,data or information obtained from a reliable and independent source;

(b) identifying , where there is a beneficial owner who is not the customer, the beneficial owner and taking adequate measures, on a risk-sensitive basis, to verify his identity so that the relevant person is satisfied that he knows who the beneficial owner is, including,  in the case of a legal person, trust or similar legal arrangement, measures to understand  the ownership and control structure of the person, trust or arrangement; and

(c) obtaining information on the purpose and intended nature of the business relationship.

In addition to the above Section 6 of the Reg’s details the meaning of beneficial owner.

HMRC will expect all Estate Agents to complete verification checks on  the individual, individuals’ or owners of the legal entity  as the owners or beneficial owners of the property. They must keep evidence of the checks they have  completed. The Agent themselves must risk assess their business and put adequate checks in place.  If they are suspicious that there is a risk of money laundering or terrorist financing they must raise a Suspicious Activity Report and lodge it with the National Crime Agency.

I hope this information details the requirements.”

‘Compliance in a Box’ gives you access to a suite of services that help agents to comply with both the Consumer Protection and Anti-Money Laundering Regulations. The simplest way to establish the beneficial owners of any given property is to obtain the Title of the property which can be ordered through our platform. This will also establish upfront, any potential restrictions that might affect the eventual sale of the property. Furthermore once beneficial owners of a property have been established, you can carry out customer due diligence checks through our fully complaint Anti-Money Laundering checks. An electronic audit trail of all actions and orders are recorded and date stamped within our system, demonstrating your due diligence in the event of an HMRC audit.

For information on how we can help please contact us or complete the form below:

Register for more information

 

Verification

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