Next steps on road to AML for lettings agents

29th June 2018

The next phase of money laundering regulation to be enacted in the UK will include the provision for AML checks to be done on tenants where the monthly rental is over €10,000 (around £8,800).

Amendments to the 4^th Money Laundering Directive makes the provision as well as formally acknowledging the role of electronic checks in the client verification process.

“identifying the customer and verifying the customer’s identity on the basis of documents, data or information obtained from a reliable and independent source, including, where available, electronic identification means”[1]

Although the legislation is still in draft, it is anticipated it will be introduced before Brexit. The current timeframe indicates they will be implemented within the next 18 months.

June 2017 saw a major shake up to the anti-money laundering regime for estate agents with checks being required on buyers as well as vendors.

The 4^th Money Laundering Directive also made provisions for identifying and applying appropriate checks on domestic and foreign politically exposed persons (PEPs); Lettings was excluded.

Although It was widely anticipated that 4MLD would include lettings, it is only a matter of time before the whole of the lettings sector comes under the scope of the regulations.

HMRC, who police the estate agency sector, have set out guidance on how agents are expected to comply. The ultimate objective is to prevent the use of illegally obtained funds or terrorist funding from being legitimised through the sale and purchase of property.

As with all compliance activity, the key is to follow the guidance and ensure appropriate policies and procedures are in place.

Critically no illegal funds need to have passed through your business in order for you to be culpable.

CLICK HERE to sign up to our latest blogs to see what HMRC’s guidance says and what estate agents have in their armoury to demonstrate compliance with the regulations.

 

Compliance in a Box from Landmark is a simple pay-as-you-go toolkit to help agents fulfil their KYC 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 Regulations, please contact Compliance in a Box on 01524 220013

[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.156.01.0043.01.ENG

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