A large number of agents are putting their businesses at risk – The Guild

Posted on Wednesday, April 27, 2022

The Guild of Property Professionals has expressed grave concern that many property professionals, including estate agents, are openly worried about their own Anti-Money Laundering (AML) compliance procedures and whether they would stand up to the scrutiny of HMRC.

This follows the findings of a recent survey from Credas Technologies that found almost a third of property professionals do not believe their anti-money laundering compliance would satisfy UK customs’ scrutiny.

According to the AML platform’s report, 45% of property professionals carry out their own AML checks, with many agents placing a low emphasis on AML issues.

Just 37% believed AML was the most important issue they faced when compared with other factors such as performance targets and additional income opportunities.

Paul Offley, compliance Officer at The Guild, said: “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.”

Offley wishes to remind agents that the UK 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.

He continued: “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, which some agents find easier by making use of digital platforms.

He explained: “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.”

“Providing compliance support to our networks has always been an important part of our membership services and we are always looking at ways to enhance that support and how we can use advancements in technology to achieve this,” he added. “Things change so quickly, and we must keep up to speed on using technology as this has many benefits.”

Via @PropertyIndustryEye