14th July, 2014
Money Laundering : How Estate Agents Can Manage the Risk
HMRC supervises estate agents under the Money Laundering Regulations 2007. Guidance was issued on 20 June 2014 as to how estate agents can minimise the risks and report suspicious activity.
The penalties for falling foul of the rules are severe including civil and criminal penalties.
Areas of particular concern when managing risk include the source of funds and passing off stolen property at auctions. Warning signs of suspicious activity include difficulties in checking the client’s identity, the use of cash and if the property value does not fit the client’s profile.
Existing customers can change their pattern of transactions which should be a warning. Knowing your customer is key to avoiding the traps money launderers set for professionals.
Firms must also have a reporting procedure which could ultimately lead to a suspicious activity report to the National Crime Agency under the Proceeds of Crime Act or the Terrorism Act. This is an area where you need to be very careful not to warn or “tip off” suspected money launderers as this is a criminal offence in itself.
It is a fact of life today that regulatory obligations regarding money laundering are becoming wider and wider. The full advice can be read here.
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