Big HMRC fines for agents prompt Anti-Money Laundering guidance

Recent substantial fines issued by HMRC are a harsh reminder to agents to ensure that their Anti-Money Laundering policies are up to date, says a trade body. 

Paul Offley, compliance officer at The Guild of Property Professionals, says lettings and estate agents should do a compliance control check from time to time to ensure that everything is in order, and they are following the correct guidance and procedures to comply with HMRC regulations.

Offley says that the first thing that agents should do is login to their Government Gateway account, go to the AML section and check that their supervision status is showing as ‘supervised’ or ‘pending and able to trade’. He adds that this is crucial. 

“It is possible to miss a renewal and the supervision status lapses, so it is important to check this to ensure the correct status is reflected,” he states, going on to say that: “The next aspect that agents should check is their AML Business Risk Statement. This isn’t the AML policy, but rather the statement that the agent prepares based on the transactions they deal with and the customers that use them. 

“This is a document that the business will need to have as part of their governance and is a document that should be reviewed on an annual basis to make sure it still reflects both the type of transactions and customers the business deals with. If out of date, ensure that it is amended appropriately,” advises Offley.

Once the Business Risk Statement has been checked, the agent can move onto reviewing their AML policy. 

“This would be the document outlining how the agency is going to meet the AML guidance required by HMRC. The policy should reflect what happens in the organisation with regard to AML, looking at how the agent will do their checks, who they are going to check, and the process. If any procedure changes within the business, this should be updated within the AML policy to ensure that it reflects the current practises within the agency. 

“Business owners should take some time out to read through this policy and ensure that it absolutely reflects the processes and procedures within the business, demonstrating how HMRC guidance is adhered to. It is always good to get everyone within the agency to read through the policy once a year and sign that they have done so,” Offley comments.

Something to consider is the requirement is to demonstrate the training that is provided to staff throughout the 12-month period. 

“Business owners will need to demonstrate a record of the training their staff attended, detailing the date, who it was led by, and course content. This can be as simple as internal briefings,  a webinar or article relating to AML, as long as it is put on record” says Offley.

He notes that the final aspect is control testing. 

“As an organisation it is important to demonstrate that the policy which has been put in place is working. Whether once a quarter or once a month, the business owner should select a few transactions and go through them checking aspects such as legal ownership, risk assessment, a PEP check, financial sanctions check, ID and verification, and proof of source of funds. Have a spreadsheet with the property addresses and have a column that reflects whether they meet the standards or not. 

“Obviously if there are any gaps, it needs to be demonstrated that something has been done about it.  It is crucial that the business has evidence that there is some kind of control testing in place and their policy is effective” Offley concludes.