Estate agents should audit their anti-money laundering procedures ahead of a likely move by the Government to increase enforcement.
Zia Ullah, a partner at law firm Eversheds, was commenting on a recent Transparency International report on UK anti-money laundering supervision.
The report was critical of the low number of “suspicious activity reports” made by agents – just 179 in the year to September 2014.
The report also criticised the current regime which only requires estate agents to conduct due diligence checks on the ‘customer’ – ie, typically the seller.
Ullah said: “What the report does not address, however, is the practical difficulties it would cause the UK estate agency sector (and indeed any other regulated sector) if it were required to conduct due diligence on individuals / companies which were not their customers.”
He went on: “The issues raised by this report are likely to prompt a response from the relevant supervisors and the government to increase enforcement and review the current AML regime.
“Indeed, the influential all-party parliamentary group on anti-corruption has recently heard recommendations relating to overhauling the UK‘s AML regime.
“It is, therefore, imperative for businesses to understand the risks and their potential exposure to money laundering.
“This is particularly true for those involved in the property sector and estate agents.
“An audit of AML procedures can provide a cost-effective way of identifying and managing these risks, while ensuring that your business is able to operate as efficiently and flexibly as possible.”
It is now over five months since a number of estate agents were secretly filmed for the C4 programme, From Russia With Cash.
The programme, which went out on July 7, showed them apparently trying to help a clearly dodgy “buyer”, a Russian called Boris who wanted to fund the purchase with corrupt money.
Both the RICS and NAEA, whose members were shown in the programme, announced immediate investigations. However, neither body has reported any outcome.
Comments (2)
Its all window dressing Robert. Rather like the Right to Rent checks – a bit of an eye opener at the recent NALS conference when listening to one of the speakers from the Home Office – at just how ill thought out their rushed through bits of legislation really are. Most of the audience of agents were astounded at the answers (or rather lack of) to questions posed.
The Government will need to get their own house in order first! The sale of Wilson portfolio of about 1000 rented properties is reportedly going through to another offshore buyer for £250 million, ball park £100 million rent per annum goes into that 1 portfolio and there are simply no meaningful controls, checks or audit trails over what happens to that money.
About £40 billion rent is collected each year and no one government body has any idea where all that money is going or what tax is due on that income. It could be laundered, funding drugs and terrorism, anything no-one has a clue yet it is agents who are being recommended to get their house in order?