Estate Agency AML Policy (Commercial)

Commercial Property Estate Agency Anti-Money Laundering Policy

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This Anti-Money Laundering Policy is designed for an estate agency business dealing with commercial property to put in place a policy in order to make staff aware of money laundering, prevent money laundering taking place and assist staff if any money laundering activity is suspected. This document is also available in the Residential Property Sales Terms and Conditions subfolder.

Money laundering is the process of moving illegally acquired cash through financial systems so that it appears to come from a legitimate source. Criminals will try to conceal the origin and true ownership of the proceeds of their activities in order to turn the money from “dirty” to “clean”.

Although estate agents don’t handle transaction monies, they are often the first port of call in a property transaction and so they are best placed to identify and verify the parties to a transaction and report any suspicious activity at the outset of the transaction.

Estate agents are regulated by HMRC. A regulated business must comply with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘the Regulations’) which requires estate agents to have a written anti-money laundering policy in place. A copy of the anti-money laundering policy must be given to all staff. Staff must also receive anti-money laundering training. The anti-money laundering policy should supplement staff training. This policy should be reviewed regularly to ensure that it complies with HMRC guidance and HMRC recommend this is done annually.

Estate agents are also required to put in place a number of controls and procedures to anticipate and prevent their business being used by criminals to launder money and fund terrorism. HMRC has a useful guide for estate agents to ensure they are compliant with the Regulations. This guidance was updated in May 2019 and can be found here .

At the time of writing letting agents do not have to comply with the Regulations although this is due to change with the 5th Money Laundering Directive (which must be implemented by EU member states by January 2020) and is likely to be implemented by the UK even if the UK has left the EU by then.

Although estate agents (that also carry out lettings work) currently do not need to carry out anti-money laundering checks in respect of their lettings work (unless the rent is paid up front in a one off transaction worth 15,000 euros or more) they will still need to report any suspicious activity that they become aware of in their lettings work.

Failure to comply with the Regulations can result in civil penalties or criminal prosecution. Senior managers and nominated officers can also be found personally liable for a breach of the Regulations.

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