The impact of the 4th Money Laundering Directive on the UK is wide reaching, not least in the property sector.
The new anti-money laundering directive was passed by the European Parliament and is due to come into law on 26th June 2017, with the aim of stepping up the fight against money laundering and impeding terrorist financing.
The new directive is good news in helping to protect the integrity and stability of society by making it more difficult for those engaged in crime to profit from their criminal activities.
However, what are the potential implications for Estate Agents?
Here at Contego we continually monitor the complex regulatory environment, to help ensure that all our clients are up-to-date with new regulations and can plan accordingly.
As a property professional, it may be of interest to watch Richard Ingles, Contego’s Head of Client Development, as he explains more on the upcoming 4th AML directive.
We have managed to highlight the 5 areas you will need to focus on to help ensure compliance with 4th AML directive:
- Emphasis on a risk-based approach
- Enhanced Customer Due Diligence
- A central register for Beneficial Owner Monitoring
- Comprehensive AML checks on both buyers and sellers of property transactions
- Greater focus on Politically Exposed Persons (PEPs)
The current UK regulations already incorporate a risk-based approach, but the new AML directive goes even further and it seems to require more documentation of the risk assessment on your potential and existing customers.
One of the biggest challenges resulting from the directive’s enhanced customer due diligence requirements is that you will see an increasing volume of customer ID documents that need to be checked, verified and stored.
At Contego we can foresee several potential challenges Estate Agents may face:
- Increased operational burden
- Increased compliance costs
- Slow customer onboarding times (or impact to customer user experience)
- Greater regulatory scrutiny
- Higher fines for non-compliance
To complicate the legislation further, it is not only affecting Estate Agents; the rules also apply to Letting Agents who carry out ‘estate agency’ work.
So, do you fully understand the new rules and how it will affect your business?
Are senior staff aware of the impact of the new Directive? Is staff training required?
How will your business take a more risk-based approach?
A lot to take in?
Here at Contego we advise both Estate and Letting agents to prepare for increased money laundering regulations to help keep the regulators at bay.
Some of the UK’s largest property firms rely on us to mitigate fraud risk when onboarding their customers. We help them ensure they not only comply with current Money Laundering and Right to Rent regulations, but we importantly help them go beyond this and help them consider increasing and new emerging threats and legislation.
Despite the headache that comes with increased regulation, embracing the latest technology can actually give you a competitive advantage.
If you want to ensure you are doing the maximum possible today to reduce your risk and get ready for the 4th AML directive, whilst keep the regulators at bay, then get in touch by calling on +44 (0) 1235 375 000 or visit our website and request a demo/Meeting.