Agencies targeted by crime syndicates, claims trade body

The UK lettings and estate agency is being targeted by crime syndicates in order to launder dirty money.

That’s the claim of the compliance team at The Guild of Property Professionals, responding to a recent survey that showed almost a third of property professionals believed their own Anti-Money Laundering procedures would not stand up to the scrutiny of HMRC.

From October last year, letting agents who deal in rental properties worth more than €10,000 or £8,300 a month must be registered for AML purposes with HM Revenue and Customs.

According to The Guild’s Paul Offley it is remarkable that so many agents are putting their businesses at risk, especially considering the massive fines HMRC have issued in the past for breaches.

He claims that the property market is targeted by organised crime syndicates as a means of laundering their money, which is why the sector need to remain vigilant and ensure that the correct procedures are in place to assist in eradicating the practice of money laundering through the housing market, and to protect agents and their business from being linked to criminal activity.

“We have seen financially crippling fines issued within the industry by HMRC to agents for AML breaches, and not having robust procedures in place is putting both an agent’s livelihood and reputation at risk” says Offley.

“While many agents may believe that a visit from HMRC will never happen to them, if it does, not being able to demonstrate the correct AML procedures will have dire consequences for the business. It shouldn’t be a risk that an agency is willing to take. It is crucial that an agency is prepared and stays up to date with the latest changes to the regulations to ensure they remain compliant. A business should ensure that their AML policies are reviewed on a regular basis to confirm that they meet the latest requirements.”

According to Offley, agents will need to keep a record of the fact that they have gone through the correct procedures and performed the appropriate checks. 

“Making use of a digital platform … will help agents to show the evidence required as part of their compliance with AML procedures. Apart from identifying any potential PEP or financial sanctions positions, these procedures also include identifying the legal owner of a property, a complete risk assessment on all sellers and buyers, appropriate and timely identification checks, and that the agent has kept accurate records. 

“That is one part of the AML process, there is then the need to refer any ‘high’ risk case to your money laundering officer and continue with ongoing monitoring throughout the transaction. It is important that agents can show they have performed their due diligence and taken the necessary steps, which a digital platform can assist with by providing an essential audit trail” he comments.

Offley adds that in additional to the compliance platforms offered by The Guild, the network also offers its members a review which focuses entirely on the agency’s AML procedure, with the sole objective of ensuring that the business is fully compliant with the Money Laundering Regulations.  

“If required, the review includes a rewrite of the agent’s Money Laundering Policy to ensure that they fall in line with the current regulations. It also includes briefing all office staff to ensure they understand and are following the correct procedures, as well as a check on all systems to ensure they are up to standard. The processes and controls are tested thoroughly to ensure they are effective and meet the required criteria.  

“All property professionals should familiarise themselves with the procedures and requirements as much as they can, as well as implementing processes or technology which will make AML compliance easier.  Money Laundering Officers need to be able to demonstrate that they can perform their duties and making AML procedures a priority will ensure business are not hit with a hefty fine from HMRC” he concludes.