Anti-Money Laundering: ARLA worry over agents’ responsibilities

ARLA Propertymark has set out its concerns over draft guidance on anti-money laundering produced by a body called the Joint Money Laundering Steering Group.

The JMLSG is a private sector body consisting of financial services trade associations and while its guidance is not legally binding it does receive HM Treasury approval.

ARLA Propertymark’s concern is that the guidance expects letting agents to conduct customer due diligence to a level that goes beyond legal requirements.

A statement on the ARLA website, relating to the concerns it has put to the private sector body, says:

“Financial institutions must be aware that under the Money Laundering Regulations the scope of regulated businesses in the property agency sector was expanded in January 2020 to only include the letting agency sector for high-value transactions with a monthly rent of 10,000 euros (or an equivalent amount) or more, whereas all letting agents in England, Wales and Scotland must adhere to Client Money Protection rules.

“Within the current framework for Pooled Client Accounts, letting agents find it very difficult to open client accounts with no legal requirement for all letting agents to register with HMRC for Anti-Money Laundering Supervision. This makes it very difficult for letting agents to adhere to the Client Money Protection rules.

“Unless these regulations are explicitly stated in the guidance Propertymark is concerned that firms will continue to be unable to distinguish between those letting agents who need to comply with Anti-Money Laundering requirements and all letting agents who are required to comply with the Client Money Protection rules.”

ARLA Propertymark then sets out specific amendments it believes should be made to the JMLSG guidance to bring it into line with legal requirements.

You can read the full and detailed ARLA letter to the body here.