Estate agents are being warned to make sure they are compliant with all money laundering regulations, following a warning that unscheduled checks are being carried out across the country.
The National Association of Estate Agents warn that HMRC have been making unannounced visits to agency offices to check that the organisations are adhering to anti-money laundering procedures.
Battling crime
In a statement, the association said:
‘We wholeheartedly support HMRC in conducting these checks and in the wider battle to fight the criminals. We also want to ensure that NAEA agents are the best in the business, but understand that with so many other priorities it’s easy to let your knowledge slip, and even the most diligent of agents need refreshers now and again.’[1]
While the number of visits made by HMRC is unknown, it is not thought that the agencies visited had raised suspicion of illegal activity.
Duties
In response to the activity from HMRC, the National Association of Estate Agents has issued a number of duties expected of agents to make sure they comply with money laundering rules.
With regards to suspicious activity, the NAEA say that agents should be vigilant of:
- activity that does not make commercial sense
- clients seeming uninterested in the transaction
- prices that do not match up with market value
- any purchases made where the property has not been viewed or just seen on the internet
- weak reasons for paying cash, ie offering large cash sums for payment of property purchases, interest, rent or fees
- cash exchanges between seller and buyer, including a cash deposit
- unusual sourcing of funds. This could involve third parties, large payments for private funds and cash gifts
- unsatisfactory explanations of early redemption of mortgages, notably where there has been penalties involved
Where an agent believes illegal activity has occurred, they should complete a National Crime Agency Suspicious Activity Report (SAR) to comply with the Proceed of Crime Act 2002. SAR’s should include all available Customer Due Diligence information.
Additional information on money laundering and how to properly complete a SAR can be found at www.nationalcrimeagency.gov.uk
[1] http://www.estateagenttoday.co.uk/breaking-news/2015/6/hmrc-making-anti-money-laundering-spot-checks-on-agents