The UK housing market is particularly vulnerable to money laundering attacks, especially nowadays. As a result, a recently revised government guidance on anti-money laundering (AML) was announced.
The guidance outlines what estate agents should do to carry out money laundering checks on all their landlords and prospective property investors.
The Financial Action Task Force (FATF) revised its Risk-Based Approach Guidance for the Real Estate Sector set of regulations. Announced last 26 July 2022, the guidance urges estate agents to carry out stricter compliance, due diligence, and record keeping. For this purpose, estate agents are also asked to assess and report any suspicious activity which their businesses may face.
Purchasing property in the UK is a common method used by organised criminals for money laundering. Property investments are expensive and require a lot of money. For this reason, property investments are convenient ways for criminals to launder a lot of their cash at once.
Consequently, the FATF is asking estate agents to accomplish these money laundering checks on everyone buying property through them. This is to ensure their property investors are using money that comes from legal sources.
Get Ready For More Anti-Money Laundering Paperwork And Forms
Estate agents and landlords will have to do more mandatory paperwork for due diligence and to complete money laundering checks. To help them with this process, the recently approved government guidance was revised to clarify the money laundering regulations.
As a result, estate agents will be required to accomplish more money laundering checks. According to the revised regulations, these may include customer due diligence, record keeping, and reporting suspicious activity. Furthermore, estate agents are also required to complete more anti-money laundering documents. To read the FATF revisions, click on this guidance document link.
Furthermore, estate agents are now required to carry out due diligence on property investors and landlords, tenants and permitted occupiers, guarantors, and other relevant parties.
Regular Updates To Complement Money Laundering Checks Now Mandatory
In addition, the FTAF also requires estate agents to submit written risk assessment updates of their property investors and landlords.
To accomplish this, estate agents will also need to maintain written policies, controls, and procedures. These will help mitigate and manage the risks of money laundering and terrorist financing. To emphasise the importance of these money laundering checks, businesses are obligated to appoint senior management as responsible for compliance.
Timothy Douglas, head of policy and campaigns for Propertymark, the UK’s leading professional membership organisation for estate agents, says that without action, the UK housing market is vulnerable to money laundering intrusions.
“We know that additional legislative measures will be introduced as part of a second Economic Crime Bill later this year to safeguard and support the UK’s open economy and it’s clear from the review that the UK government is proposing further work through a second Economic Crime Plan to improve the implementation of the regulatory framework.
Alongside action from businesses, effective supervision is key, and we will continue to work with the UK government to shape future reforms.”
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