Estate agents have been hit with unannounced inspections as part of a week-long crackdown on money laundering in the property industry, HM Revenue and Customs revealed this morning.
HMRC officers visited 50 estate agents across England after they were suspected of trading without being registered as required under money laundering regulations.
The visits came as HMRC also published the latest businesses hit with fines for failing to comply with the regulations. This includes estate agent Countrywide Estate Agents receiving a £215,000 fine.
HMRC told EYE it will now take action against the visited businesses who have failed to comply, which can include fines, publication and criminal proceedings.
John Glen, economic secretary to the Treasury, said: “The vast majority of estate agents play by the rules and help us to crack down on dirty money. But I have zero tolerance for firms prepared to turn a blind eye to the law.”
“Money laundering regulation exists to help protect honest business, so anyone who flaunts the law should know that swift action will be taken.”
Ben Wallace, minister for national security and economic crime, said: “Criminals who seek to use this country as a place to launder money should be in no doubt that they have nowhere to hide. Estate agents are a crucial line of defence against them.”
Simon York, director of HMRC’s fraud investigation service, said: “Estate agents need to understand that criminals prey on weaknesses, so it’s vital they take all steps to protect themselves. The money laundering regulations are key to that, but there’s still a minority of agents who ignore their legal obligations.
“These inspections are a wake-up call that if you continue to trade illegally we will come knocking.”
This is the first such week of action involving intelligence-led, co-ordinated activity aimed at estate agents/
The visits involved HMRC inspectors questioning the businesses to establish whether they were trading in breach of the regulations. Inspectors then assess whether any further action is required.
The places visited, together with the number of estate agents visited, in the latest crackdown were:
London (35)
· Leicester (5)
· South Bucks and Berkshire (4)
· Greater Manchester (3)
· Watford (1)
· Wakefield (1)
· Wolverhampton (1)
Comments (11)
Don’t think money laundering is just the exchange of money. Far from it. A money laundering offence can take place if an estate agent facilitates the acquisition of criminal property by another person, e.g introducing a buyer using dirty money. The house being sold by a fraudster.
The Government are trying to combat money launderers and are therefore bringing more and organisations under the duty to look out for it.
It is well documented that the property market is a prime target for money laundering and financial crime. The use of dirty money! That’s why solicitors have been required to comply with the ML rules for years now, and now individual estate agencies are required to register with HM Revenue & Customs (HMRC) for Anti-Money Laundering Compliance whilst Trading Standards are responsible for conducting supervisory visits.
Too many properties are sold by fraudsters, and too many reach the hands of conveyancers without adequate checks having been made against the person who claims to own the property the estate agents are selling.
Estate agents now have to scrutinise both the seller’s snd house buyers’ ID but also the buyer’s finances to make sure they are not buying property with dirty money.
The ML Regulations set out what estate agency businesses must do to prevent their services being used for money laundering or terrorist financing purposes – e.g
●customer due diligence – ID checks, not only of the seller, but the buyer too. In the case of the seller, make sure your secure ID that links them to the sale property itself. Government prescribed ID is here: https://www.gov.uk/government/publications/proof-of-identity-checklist/proof-of-identity-checklist
●reporting suspicious activity
● record keeping
● appointment of a Money Laundering Reporting Officer (MLRO)
●staff awareness/training.
It is serious stuff. Estate agency staff must raise an internal report where they know or suspect another person is engaged in money laundering (whether a transaction has taken place or not).
This report needs to go immediately to the MLRO who needs to assess whether there are grounds to pass to the National Crime Agency (NCA). The NCA will then determine whether the agent can proceed with the transaction.
Even Rightmove have published guidance: https://hub.rightmove.co.uk/anti-money-laundering-checklist/
https://www.gov.uk/government/publications/money-laundering-regulations-2007-supervision-of-estate-agency-businesses https://www.naea.co.uk/news/february-2018/understanding-your-aml-obligations/
Ahem.
https://www.propertyindustryeye.com/purplebricks-to-withhold-commission-from-local-property-experts-after-over-450-breaches/
“Altogether, the business itself agrees there are 450 properties listed in the last fortnight in July that were not compliant with the law…”
This is long overdue. I have read estate agents in Central London on these very forums basically celebrating money laundering in PCL property and whining about the Government trying to cut it out. The sooner an estate agent in London gets prosecuted for abetting money laundering the quicker the rest will start taking it seriously.
Tosh.
London agents on the whole are far more up to speed on this issue as the capital has been the target for a long time.
however, the criminals are targeting other cities now.
News Flash. The EU announces criminals Human Rights being breached by Agents having to carry out yet another task that should be down to someone else. John Glen, economic secretary states ‘ the vast majority of Agents do whatever we tell them to do and there is actually more chance of marrying a Kardashian than coming across a Money Launderer, but keep sending in your subs anyway.
Who handles the money in a transaction?
The estate agents? No!
The solicitor/conveyancers? Yes!
How utterly typical of a government agency to repeatedly go barking up the wrong tree.
Estate agents are all easy targets!!!
Why? Most conveyancers carry out rigorous AML checks already.
Surely their efforts would be better placed with Conveyance Solicitors?
If Countrywide or whoever wasnt trading in accordance with HMCR rules then that is one thing. But lets get one thing straight. Countrywide are not criminals, yet HMRC are trying to make them come across as such. Yes it is the law so we must comply, but it is horrendous that estate agents, who do not handle any of the clients money are made to deal with it, yet the banking system which moves all the money around constantly gets away scot free!
Corporates & Call-centre agents are an easy target – notice that Settled were also fined £3,245 – how many others not itemised by HMRC?
What were the £32k fines listed in the recent House Simple published accounts?