HM Revenue and Customs (HMRC) has reported that they have issued fines totalling more than £1.6 million to over 250 estate agencies for not complying with anti-money laundering regulations. The penalties given out range from £1,500 to upwards of £50,000.
In the next few weeks, HMRC will release a detailed list of estate agencies that have been fined for not adhering to these rules. The infractions include the lack of company-wide records, not completing Customer Due Diligence (CDD) in time, and not recognizing specific risks associated with property transactions, such as property value, dealing with high-risk countries, politically exposed persons, companies, trusts, and sanctions.
Malcolm Driscoll, a lead anti-money laundering (AML) Consultant at FCS Compliance, comments that registering with HMRC is a fundamental requirement under Money Laundering Regulations, yet many businesses don’t fulfill this basic step, either through not knowing or mistakenly thinking the regulations don’t apply to them.
He compares AML obligations with driving regulations, saying that while people understand the need for a driving license, insurance, and passing a test to drive, they sometimes don’t recognize that similar obligations apply to carry out property transactions that involve large sums of money.
HMRC plans to release more information on additional penalties following their inspections, some of which will have been conducted in person.
Driscoll emphasizes that to avoid non-compliance, businesses require a precise AML Policy & Procedures Manual, an AML Risk Assessment tailored to the company’s operations, an understanding and adherence to legislation, and regular staff training. HMRC pays close attention to these factors during their surprise and short-notice inspections.
He warns all agents that they are vulnerable to these risks and must take steps to avoid potential harsh fines from HMRC.
