The recent sanctions on Russia imposed by western nations following its invasion of Ukraine are a reminder to estate agents that they must go through the process of reviewing all client identity information to ensure that the potential buyer is not from a country listed on the financial sanctions register.

Paul Offley, compliance officer at nurtur.group, parent company of The Guild of Property Professionals and Fine & Country, advises that agents check financial restrictions on a regular basis as part of their anti-money laundering (AML) process.

Offley commented: “With regard to financial restrictions things are moving very quickly, so agents need to apply more frequent on-going monitoring to make sure they are following the correct procedures with the most recent information. If they haven’t already done so in the wake of the current events, agents should be reviewing their initial risk assessment.

“Be aware that UK government have taken steps to effect restrictions from undertaking financial transactions involving the Central Bank of the Russian Federation, the Russian National Wealth fund and the Ministry of Russian Finance. It is vital to review all transactions and take the necessary steps if you believe you have a specific case.”

Agents should also ensure that all client identity information is checked against the UK Sanctions List.

He continued: “If need be, request additional identity information to ensure you do not have a false-positive identification and you can more accurately rule out the possibly that the individual or entity is from a country on the UK Sanctions List.  HM Treasury’s Office of Financial Sanctions Implementation (OFSI) also provides a consolidated list of all persons and entities that are subject to sanctions which are effective in the UK.

“If an individual or entity you are dealing with matches the information on the consolidated list, the transaction must be suspended, and the matter should be reported to either your money laundering reporting officer or your money laundering compliance officer.”

According to Offley, agents will need to keep a record of the fact that they have gone through the correct procedures and performed the appropriate checks.

He added: “Making use of the digital platform such as movebutler from iamproperty will help agents to show the evidence required as part of their compliance with AML procedures.

“Apart from identifying any potential PEP or financial sanctions positions, these procedures also include identifying the legal owner of a property, a complete risk assessment on all sellers and buyers, appropriate and timely identification checks, and that the agent has kept accurate records.

“It is important that agents are able to show they have performed their due diligence and taken the necessary steps should they find themselves dealing with an individual or entity that appears on the sanctions list.”