Huge number of agents penalised for breaking AML rules

Huge number of agents penalised for breaking AML rules


Todays other news

Trade body Propertymark has revealed that no fewer than 144 agents were sanctioned in just three months for allegedly breaking HMRC anti-money laundering rules.

The offences were between October and December 2023, but these are the most recent figures published by HMRC.

Propertymark says most fines were for failing to register at the required time, and the amounts ranged from £1,250 to £52,000. 

However, it says the largest fine on the list is for a High Value Dealer – thought to be an auctioneer – ordered to pay £175,701 for multiple failures in carrying out risk assessments, having the correct policies, controls and procedures, appropriate staff training, conducting due diligence, and record keeping.

In a statement on its website, the trade body says agents must correctly apply for and maintain an up-to-date registration with HMRC.

It says: “Whilst we actively advocate for more precise guidelines and understand the complexities of the current process, it’s crucial that agents understand the severity of the consequences of failure to register. The penalties for non-compliance are significant and can have a lasting impact. Agents could face a prison sentence of up to two years or an unlimited fine.”

It reminds that the definition under AML legislation of ‘Letting Agency Businesses’ (LABs) is ‘a firm or sole practitioner who, or whose employees, carry out letting agency work when an agreement is concluded for the letting of land for a term of a month or more, and at a rent which, during at least part of the term, is or is equivalent to a monthly rent of 10,000 euros or more.’ 

This applies to both residential and commercial properties.

LABs must register with HMRC for anti-money laundering supervision if they handle client money, including fees, deposits, and rent, and if their rental activity exceeds the threshold.

There are similar but not identical rules for estate agents and auctioneers. 

Propertymark adds that steps agents must take include:

  • Develop a written, up-to-date risk assessment of the location operating in, customers and the value of transactions undertaking;
  • A written policy statement and procedures to show how the business will manage the risks of money laundering;
  • Train and support staff to understand and implement these policies;
  • Ensure procedures and audit processes are applied to all branches in or outside the UK;
  • Appoint a nominated officer (Money Laundering Reporting Officer – MLRO) to report suspicious activity to the National Crime Agency (NCA) and a Deputy Money Laundering Reporting Officer;
  • Ensure suitable control measures are in place.

You can see HMRC guidance for letting agents here https://www.gov.uk/government/publications/money-laundering-regulations-2007-supervision-of-estate-agency-businesses

And Propertymark guidance here https://www.propertymark.co.uk/resource/fact-sheet-money-laundering-regulations-2019.html

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