The property sector continues to pose concerns about money laundering as noted in this article. This is despite the bar being raised for Estate Agents under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (MLR 2017) which came into force in June 2017. The main changes for the property sector were: Firstly, buyers, as well as sellers, are now considered as customers and Customer Due Diligence (and Enhanced Due Diligence where applicable) must be applied at the point the business relationship begins. Secondly, domestic Politically Exposed Persons (PEPs) and foreign PEPs, are to be identified and Enhanced Due Diligence applied.
As noted, HMRC has conducted fewer than 55 investigations against estate agents for breaches of the UK’s money laundering regulations in the last six years. This highlights a key weakness in implementing the MLR 2017 and indeed the EU 4th and 5th Money Laundering directives i.e. the absence of a central Money Laundering regulator. The FCA, HMRC and other UK regulators need to work with the EU to establish a cross European central regulator to help co-ordinate efforts across multiple jurisdictions.