There should be a serious overhaul of the way anti-money laundering rules are supervised.
The call has come from Transparency International after it emerged that HMRC is considering ending its role as the anti-money laundering regulator of sectors including estate agents.
HMRC has told the Treasury Committee that as part of next year’s government spending review, it plans to discuss whether other organisations would be better suited to the task.
HMRC currently supervises professional services, estate agency, high value dealers, and trust and company service provision.
Transparency International has previously criticised the performance of HMRC as AML supervisor, and in particular highlighted the estate agency sector as being particularly at risk of money laundering.
Its research has found that £4.4bn worth of property across the UK might have been bought with suspicious money.
Transparency International says this could just be the tip of the iceberg. Across the UK 86,000 properties are owned through anonymous companies registered in secret havens, a common method used by corrupt individuals to hide their identities.
Despite high levels of risk in the sector, just 0.12% of all reports to the police of suspicious activity in 2015/2016 were by estate agents.
Transparency International says that one reform that is needed is transparency over enforcement action.
It also says that fines should be “meaningful”.
HMRC declines to say what action it has brought against agents, or how many fines it has issued.
Duncan Hames, Director of Policy at Transparency International UK, said: “We welcome HMRC’s open reflection on their role in preventing money laundering in the UK, and the priority they are able to give it. The National Crime Agency has observed there is a realistic possibility that hundreds of billions of pounds of money laundering impacts the UK every year.
“Our current defences have failed to curb the influx of dirty money, and it must now be a clear priority for any organisation taking on that role.
“Any review of the UK’s anti-money laundering supervision must be prepared to seriously overhaul what has been a weak line of defence.
“It’s absurd that in the property sector, where commissions on luxury homes can be in the tens of thousands of pounds, money laundering fines average just £1,000.”
Comments (7)
When you say campaigners, do you mean profiteers?
It seems to me that so-called campaigners usually have a hidden, self-serving agenda = profit.
Criminals who launder money use bent agents and solicitors, simple.
Arrest the criminal, stop the flow of drugs onto an island, shut down the labs, and stop making it everyone else’s fault.
In most small towns, everyone knows who they are, and yet they are untouched.
Can someone explain to me why Estate Agents even fall under the AML regs?
All we do is duplicate the checks that the solicitors/conveyancers do – and they are the ones that handle the money.
How can an Agent ‘launder’ something they never receive?
I think it is because we work at the coalface and are seen as the first line of defence. If we have done it properly, then the few that slip through should be caught by the solicitors.
Partly because some cases can be spotted a mile away and if you see it and choose not to report it then you are in effect ‘assisting’ with the process. Also partly because the govt wants everyone to become self-regulating and if they make us all responsible/accountable then they have to do less work to weed these people out.
See GDPR for the same principle – you must check that all your suppliers and people you refer to are GDPR compliant and if you don’t, you can get fined. Self-policing, less work for them.
The money laundering reported that estate agents abuse is drop in the ocean to what UK banks are doing via SPV trusts to hide cash flow in and out of the UK. And how banks do not update the land registry charge when they “assign” and “securitise” selling the “promissory” note repayment schedules to replace their own funding.
Look in the land Registry Act 2002 and then in the 4MLD (fourth money laundering directive). Same terms, same words, such as:
settlors, trusts, beneficiaries, receivables, etc. .
BANKS DON’T LEND, BANKS SELL (PROMISSORY NOTE) DEBT
FTB mortgages re also becoming longer terms of 30-40 years, meaning banks are securitising bigger sums over longer periods. Banks have been targeting HNW property owners to asset strip and use choice valuers to BMV (under value)
Estate Agents are not the big big worry. but banks should be looked at very very closely (and their lawyers and valuers) enabling £billions being lost to the economy.
As I’ve mentioned before Estate Agents are currently governed by the same law that applies to Solicitors in relation to AML. My experience is that it isn’t taken at all seriously by estate agents.
The fines referred to are those a Regulator can impose.
What Estate Agents ought to be worried about are the punishments for failing to comply with AML law. You should look up the Regulations and reassess your own procedures.
Rather than actually look at the bigger problem, lets just increase the fine for estate agents eh!