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Updating your Anti-Money Laundering Process

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Dirty Money.  Know the Signs. Report the Crime.

The Government’s new “Flag it up” campaign targets UK Money Laundering and is aimed at increasing awareness among estate agents, accountants and solicitors of their obligations with regards to Anti-Money Laundering.

Criminals continue to employ a range of ‘techniques’ to clean their “dirty money” and the property sector continues to be targeted because expert skills and services give a cloak of legitimacy to illicit cash. This is why, as estate agents, we have a crucial role to play in protecting the UK’s economy, and wider society by reporting suspicious activity.

As estate (or high value letting agents) you are legally obligated under the 2017 Money Laundering Regulations to submit a Suspicious Activity Report (SAR) to the National Crime Agency if you suspect that money laundering may be taking place.  A high quality SAR can provide crucial intelligence for law enforcement and can help to prevent a wide range of serious and organised crime and terrorist activities.  Investigations are often based on multiple SARs, and your report could be the missing piece of the puzzle.

While money laundering isn’t always obvious, the consequences are severe.  Even accidental involvement in money laundering could mean you receiving a hefty fine or facing criminal prosecution.  It’s estimated that £100 billion is laundered through the UK every year and the number of estate agents being fined for failing to comply with the AML regulations is increasing. To top it off the HMRC are also now levying administration fees as well as fines for AML breaches. Trading Standards have now had their budget doubled in order to better police the estate agency sector on consumer protection, so it really is the time to get your staff fully compliant.

Your estate agency requirements:

– Nominate a member of staff to act as a Money Laundering Reporting Officer (MLRO) to receive and consider internal disclosures of suspicious activity from within your business and make suspicious activity reports to the Serious Organised Crime Agency

– Appoint a senior member of the management team to take responsibility for compliance with the 2017 Regulation  

– Confirm your customer’s identity before entering into a business relationship or occasional transaction with them and obtain information on the purpose or nature of the business relationship

– Conduct ongoing monitoring of the business relationship as appropriate to ensure that transactions are consistent with your knowledge of the customer and the customer’s business

– Keep records obtained in establishing your customers’ identity and of business relationships for five years

– Put in place checks, controls and procedures in order to anticipate and prevent money laundering or terrorist financing

– Train your staff in your AML procedures and in the law relating to money laundering and terrorist financing

– You must also have an Anti-Money Laundering Policy in place, which includes a risk assessment that outlines how you complete your Customer Due Diligence, what circumstances you would consider to be high risk, and how you would deal with those situations.

The ‘Flag it Up’ campaign has been launched following the publication of updated figures showing just 0.7% of Suspicious Activity Reports submitted to the National Crime Agency came from estate agents; compared to 83% by banks.

Deputy Director of Anti-Money Laundering Kate Pitt said “This campaign sends out a strong message to all estate agents that they need to have appropriate measures in place to prevent their business from being used for money laundering or terrorist finance purposes.” “Flag it Up” reminds agents of their responsibilities under the Money Laundering regulations and provides some common themes to look out for when it comes to identifying the risk of money laundering.

In short if you’re suspicious, Flag It Up! https://flagitup.campaign.gov.uk/

 

UPDATED 26TH FEBRUARY: There has been an update to the Flag It Up campaign with additional materials released which can be viewed by clicking here

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