HMRC has issued fined which total in excess of £1.6 million to estate agents who have failed to register or re-register with them for Anti-Money Laundering (AML). The fine imposed on the 254 estate agencies involved ranges from £1,500 to more than £50,000.
Registering with HMRC is a requirement of the Money Laundering Regulations (MLR). However, many businesses do not believe that the regulations apply to them – or simply ignore them.
HMRC intends to name and shame those found to be in breach of the legislation during its inspections and on-site visits, by publishing a follow-up list of those have been penalised.
The types of breaches made by estate agencies include: a lack of documentation; incomplete or incorrect Customer Due Diligence within the required time frame; and a lack of recognition of specific risks (such as property values, high risk jurisdictions, Politically Exposed Persons, companies, trusts and sanctions). HMRC can make sometimes random and short notice inspections.
Anyone trading as an estate agent, high value dealer or property auctioneer must by registered with HMRC for Anti-Money Laundering supervision. Letting agents dealing with properties with monthly rents equivalent to 10,000 euros (around £8,500) are also obliged to register. Failure to register is a criminal offence.
Estate agents must register if they act on the instructions of a customer wanting to buy, sell or let an interest of land either in the UK or overseas, or introduce their customer to a third party to secure the sale or purchase of the interest in land. This includes such activities as sending out property details, arranging viewings, valuing a property or arranging an energy performance certificate.
To avoid flouting the rules, estate agents must have suitable written risk assessments and policy statements, trained staff who understand and implement the policies and a nominated officer to report any suspicious activity.