Estate Agents Struggle With AML Compliance
Over 66% of UK estate agents are failing to comply with HM Revenue and Custom’s (HMRC) anti-money laundering (AML) expectations or the EU’s fifth anti-money laundering directive (5AMLD).
According to recent findings by conveyancing firm iamproperty, estate agents are struggling to adequately understand their obligations when it comes to cracking down on money laundering in the property sector.
Only 46% of agents are confident that all AML regulations have been understood and properly implemented whilst less than half (40%), have failed to complete any training despite a quarter of estate agencies being fined for non-compliance in the past.
Almost half (40%) of those fined by HMRC were yet to make changes to policies or procedures concerning anti-money laundering.
The sector has been historically reluctant to complete due diligence procedures like suspicious activity reports (SARs), making up just 0.15% of the UK’s total in 2018.
The research would suggest that the sector could benefit from specialist regulation.
Lord Best, Chair of the Regulation of Property Agents Working Group, has stated that there is not really anybody opposing the regulation of property agents. However, the process of fully regulating the sector is likely to take two years.
Best has suggested managing agents will likely be regulated but private freeholders who manage their own properties, private landlords and developer agents will fall outside the remit of new regulations.
Ben Ridgway, Group Managing Director at iamproperty, said:
“This research has given us a revealing new insight into the understanding of and adherence to the increasing regulatory burden facing estate agents.
“Under the current regulatory environment, it’s never been more important for estate agents to undertake a thorough examination of each and every sale, using whatever tools they can to reduce the impact on their business.
“The research told us that almost a third of Estate Agents were still managing their compliance manually and relying on their instinct to flag concerns with an aspect of a sale.
“Yet, they are also faced with an increasingly challenging selling market.
“Now more than ever, Estate Agents cannot simply rely on their senses when sniffing out suspicious activity.”