How to write your AML risk assessment

15th October 2018

The Money Laundering Regulations require estate agents to risk assess their business relationships and apply an appropriate level of investigation to ensure that they understand who their customer is, and why they are involved in the transaction.

In its guidance ‘Anti Money Laundering Supervision: Estate Agency Businesses’ HMRC outline agents should have a process in place to

assess the risks that your business may be used for money laundering or terrorist financing, and put in place appropriate measures to manage and lessen those risks. (3.1)

It is important to keep in mind the activity by all parties involved, including banks, IFAs, estate agents, solicitors etc.  is undertaken to mitigate the risk of illegally obtained funds or terrorist funding from being legitimised through the sale and purchase of property

It might be useful to think about your risk assessment in similar terms to your Health & Safety compliance.

You assess a risk to your business, consider ways to mitigate the likelihood of that risk happening, and put appropriate measures in place to protect your business.

When it comes to money laundering risk you need to consider how your own risk assessment could be affected by

• where you operate: high value transactions/ area of high 2^nd home ownership etc.
• your clientele: cash buyers/ foreign investors/ companies or trusts/ politically exposed persons (PEPs) etc.
• how you win new business: taking instructions from 3^rd parties/ remote clients etc.
• your stock: repossessions/ lettings portfolios/ relocation etc.
• the transaction itself: private banking/ anonymity/ unusually low value for property type

On a practical level you should have a process in place to identify in what circumstances it is appropriate to apply Customer Due Diligence (CDD) and when you need to be doing further investigation and applying Enhanced Due Diligence (EDD).

Your risk assessment should also identify what steps you would take when EDD is applicable.

 

NEED SOME HELP? Do you have a risk assessment in place for AML? If not, book a short consultation with us and get your tailored risk assessment in place today.

 

For more information about how and when to apply CDD and & EDD sign up to our 3 part blog series, Is a Passport Enough for AML?

 

Compliance in a Box from Landmark is a simple pay-as-you-go toolkit to help agents fulfil their AML obligations. From one account you can undertake and evidence:

• Verification of buyers and sellers within a minute inc PEPs and those on sanctions lists
• Enhanced due diligence where your risk assessment identifies it is needed
• Confirmation of home owners and boundaries
• Identification of beneficial owners in cases where businesses are involved
• Support with verifying foreign national both in the UK and abroad

For more information about undertaking and evidencing your compliance with the Money Laundering Regulation 2017, sign up below or please contact Compliance in a Box on 01524 220013

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