Anti-money laundering ‘approvals’ – call to owners, directors and major shareholders to sign up

Owners and directors of agency businesses can start signing up to the new anti-money laundering regime next week. They can also expect an increase in mandatory AML fees.

The 2017 Money Laundering Regulations introduced a new requirement for owners and directors of estate agency businesses to be approved. The regime also takes in shareholders who own 25% or more of a business.

No person can be an owner, 25%+ shareholder or director of an estate agency business unless they have been approved by HMRC to hold such a position.

Approval will automatically be granted if the individual has not been convicted of any of the listed offences, but it will be refused if a conviction is registered. There are 35 types of offences listed and they mainly relate to financial matters. You can view the list by clicking here.

Individuals without approval will be banned from holding any of the positions within any estate agency business.

The deadline for this approval is June 26 next year, but HMRC has announced it will open the gate for individuals to apply for approval on November 1.

Currently, the HMRC website does not give any further detail on the application process, but unsurprisingly, it does outline that the charge for obtaining this approval will be £40.

The HMRC announcement also included a statement that fees for estate agents will be increasing as from December 1, with annual renewal fees for each branch rising by 13% to £130.

It has also announced it will be conducting a review on how fees might change in future and will be consulting with agents on this in the New Year.

Yesterday evening, an HMRC spokesperson told EYE: “A new approvals test needs to be undertaken for relevant people in estate agency businesses.”

There is further information at:

https://www.gov.uk/government/publications/money-laundering-regulations-2007-supervision-of-estate-agency-businesses

https://www.gov.uk/guidance/money-laundering-regulations-apply-for-the-fit-and-proper-test

https://www.gov.uk/government/publications/money-laundering-supervision-fit-and-proper-test-and-approval

Please see also our next story.

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10 Comments

  1. Jrsteeve

    Time for a ban on all agent fees charged to agents from government, who’s in?

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  2. El Burro

    I’m confused. No surprise there maybe but when our renewal AMLR renewal came through from HMRC in April we were required to complete a very lengthy online application which included personal details of all directors down to their individual unique tax reference number.

    Does anyone know whether this is one of the same?

    If it isn’t why will need to supply all the information again?

     

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    1. AgentV

      We filled it out as well

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  3. revilo

    Suspect lack of response means that no-one has a clue! Me included!

     

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    1. El Burro

      Well at least we can agree on that Revilo!.

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  4. DavidCompliance

    Renewing your AML registration is one process that is due around April next year.  Individuals seeking their new mandatory personal approval is another process and that will start on 1st November and will cost each individual £40.

    They are completely separate obligations, but your directors will be banned from acting as estate agency directors if they do not have approval by 26th June 2017.

    There is no confusion over this, there will just be frustration and annoyance at additional bureaucracy and cost!

     

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    1. jeremy1960

      So we’ve missed the deadline by 4 months already?

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  5. Emmersons46

    The fit and proper test and approval-two separate but linked processes.

    HM Revenue and Customs (HMRC) carries out the fit and proper test as part of the registration process.
    The test is a series of checks that apply to you and relevant responsible people running your business to make sure that you meet the requirements of the Money Laundering Regulations.

    Below is a reminder of the process:
    Approval
    Approval is a separate process from the fit and proper test. Before certain individuals can own or hold positions of authority in a business within the accountancy service provider, estate agency business and high value dealer sectors they need approval by HMRC.

    Who the fit and proper test applies to.
    When you register (you only need to register once, but must add the details of subsequently acquired, relevant individuals online) the responsible persons must be included in your application.
    The test applies to:
    •the person applying to register the business
    •the person running the business either on their own or in partnership
    •officers of the business, including director and company secretary
    •senior managers who are engaged directly in the provision of regulated activity
    •the nominated officer
    •beneficial owners of the business
    •a person who is in effect directing the business
    •agents of money service businesses and their beneficial owners, officers and senior managers

    If you fail the fit and proper test
    If you can’t satisfy HMRC that you’re a responsible person regarding the risk of money laundering or terrorist financing you’ll fail the test.

    HMRC will ask for evidence of your honesty and integrity to prove you can understand and fulfil your obligations under the regulations.

    To reach a decision HMRC consider a range of information including whether you:
    •are being investigated or have been convicted of money laundering or other offences involving dishonesty, fraud or financial crime
    •have been disqualified from acting as a company director
    •have been subject to a confiscation order under the Proceeds of Crime Act 2002
    •have a track record of consistent non-compliance with the Money Laundering Regulations, or with the EU Payments Regulation which applies to money transmission service providers
    •have been disciplined or expelled by another supervisor or professional body for regulatory or professional failings

    If the person who fails the test is the nominated officer you can:
    •appoint someone else who already has fit and proper status
    •choose a new person to apply for the test

    Who approval applies to
    Approval is similar to the fit and proper process but different checks are made.

    The checks apply to certain individuals who own or hold positions of authority such as:
    •senior managers
    •officers
    •beneficial owners
    •sole practitioners

    If you fail approval
    You’ll fail approval if you’ve committed an offence under schedule 3 of the Money Laundering Regulations.

    HMRC won’t register your business if you fail the test and while you continue to occupy a position of authority. However you’re able to appoint another person.

    When the fit and proper and approval tests take place
    HMRC will carry out checks using the information you supply online when you apply to register for anti-money laundering supervision.

    There’s no need to apply for a test each year.
    However if a new responsible person joins your business after you’ve registered you should sign in to the online service and add their details.

    HMRC will check the accuracy of the information you provide online.

    This will include checking those details against information held by us, other regulatory authorities, government and law enforcement agencies.

    HMRC will contact you if we need you to send additional information or documents to confirm identification.

    If you pass the test, HMRC will continue to monitor your fit and proper status.

    Why is it undertaken each year? Because people come and go and people commit criminal offences.
    Why is this necessary? Property is a vehicle used by criminals and terrorists to launder money. You can unwittingly assist in this process. You now have an obligation to think about who you act for and what they are doing and to report suspicious activity. If you don’t, then you may well find yourself in the dock. So making sure that you have functioning aml policies and procedures and that all your staff understand precisely what is required of them and they receive regular (every six months) training could save you from a jail sentence. The most important thing perhaps is that you are not allowed to undertake work for a client until client due diligence checks are undertaken and recorded. Do you record the checks you make, the results of those checks and retain the same? Do you know what checks are required?

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    1. El Burro

      Who the fit and proper test applies to.
      When you register (you only need to register once, but must add the details of subsequently acquired, relevant individuals online) the responsible persons must be included in your application’.

      Our renewal was in April but we had to go through the complete registration procedure (which as you say we were told only needed to be carried out once) and that included all the personal details of the nominated officer, officers of the business etc.

      My original question was do we still have sign up as the article above suggests or would you have already carried out or will you carry out the fit and proper test our people based on the information you had from us in April?

      Apologies if I’m being thick on this point (no comments from the usual suspects please!) but just want to get it right.

       

       

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  6. OpCo27

    Having just spent 20 mins on hold to HMRC, having not been able to find any way to apply online for this additional text, I have now been advised by them that this is something which you will be required to do when you renew your application for registering for Anti Money Laundering, it is NOT something you can apply for from the 1st november, but if you need to renew after 1st Nov 2017 then this will be an additional requirement from then.

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