An agents’ trade body is urging agents to launch an anti-money laundering ‘spring clean’ ahead of a new sanctions regime starting for the lettings sector next month.
From May 14 the new system will place stricter obligations on letting agents who must ensure that neither tenants, nor landlords are listed on government sanctions lists.
Under the new rules, letting agents will be classified as ‘Relevant Firms’ under the Sanctions and Anti-Money Laundering Act 2018. As such they must conduct sanction checks on clients while ensuring they report any breaches to the Office for Financial Sanctions Implementation (OFSI).
Failure to comply could lead to fines of up to £1m and potential criminal prosecution with up to seven years in prison.
Now The Guild of Property Professionals says that recent fines issued by HMRC in relation to other money laundering breaches have served as a stark reminder of the critical importance of rcompliance. Notably, several fines were related to agents failing to maintain their AML supervision status with HMRC, a requirement that necessitates annual renewal.
The Guild says key areas critical for estate and letting agency compliance under the Money Laundering Regulations include:
- HMRC Registration: Mandatory registration for AML supervision which should be maintained at all times – agents often miss a renewal date!
- Having appropriate governance documents in place and reviewed annually.
- Customer Due Diligence (CDD): from assessing risks, verification of ID, plus PEP and financial sanction checks.
- Record Keeping: Maintaining accurate, accessible records of CDD checks and transactions.
- Suspicious Activity Reporting (SARs): Having procedures to identify and report suspected money laundering or terrorist financing to the National Crime Agency (NCA).
- Financial Sanctions: (For Letting Agents from May 14) Implementing procedures to check for and report suspected breaches of financial sanctions to the Office for Financial Sanctions Implementation (OFSI).
Failure to comply with these regulations can result in severe penalties, including substantial fines, reputational damage, and potential criminal prosecution.
