From what we understand the effects on UK are wide reaching, not least in the property sector.
From 26th June 2017, if you are an estate agent you will now be expected to carry out comprehensive money laundering checks on both buyers and sellers of properties.
This new legislation comes into force due to increasing concerns that corrupt overseas buyers have been exploiting the London property market by laundering vast sums of money. Last year, the Home Affairs Select committee released a report that revealed at least £100bn was being laundered through the UK every year. Current tools for detecting suspicious activity were “totally inadequate”, which in effect was laying out a welcome mat for organised criminals. [Source] The Committee called for an immediate and radical overhaul of UK anti-money laundering regulation.
Richard Ingles, Head of Client Development explains “the fact that house buyers are now subject to the same money laundering checks as house sellers, is certainly a step in the right direction in the fight against corruption within the property market.”
However, the UK property industry regards the decision not to include letting agents in its proposals to meet the legislative requirements of the 4th Money Laundering Directive as fundamentally wrong. It believes the legislation should apply to both sales and letting side of the business. [Source]
“We’re disappointed the Government has chosen not to include letting activity within the money laundering regulations 2017” said David Cox, ARLA Propertymark chief executive. “The risk with this is that money laundering activity will transfer from the sales sector due to the increased powers within the new regulation, into the lettings sector which remains unregulated.” [Source]
It is well thought amongst industry professionals that it is only a matter of time before new anti-money laundering regulations will come to effect for the lettings industry.
At Contego we advise, whether you are an estate agent or letting agent, that you should be ready for increasing money laundering regulation. We strongly recommend to all our clients to go beyond the required regulatory checks and perform extensive due diligence on tenants, landlords, buyers and sellers, so you know exactly who you are doing business with.
We provide our clients with the best practice fraud reduction and due diligence solution on the market. 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.
With one of UK’s largest databases of screening information available. Contego’s technology checks people, companies and ID documents in seconds – via a single API. Our breadth of data coverage and accuracy enables our clients to make crucial data-driven decisions, instantly, about who to do business with.
If you want to ensure you are doing the maximum possible today to reduce your risk and keep the regulators at bay, then get in touch today by calling +44 (0) 1235 375 000 or book an online demo today.
Watch the video of Richard Ingles, Head of Client Development, to learn how we help both estate and letting agents go beyond regulatory compliance.