Anti-Money Laundering Policy and Procedure Document
Introduction
This document and the policy contained herein, details the process and procedures we have adopted and complies with the new HM Revenue and Customs (HMRC) Supervision of Estate Agency Businesses and Letting Agency Businesses under the Money Laundering Regulation 2007, which came in to force on 1st April 2014.
It is essential that our business and its employees comply with the letter and spirit of this policy as failure to do so would be a criminal offence, which could carry a prison sentence.
Background to Money Laundering and Letting Agency Business
The Money Laundering Regulations ensure businesses at risk of being used for money laundering by criminals and terrorists have controls in place to minimise the risk of this happening. Money laundering is how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins.
Money laundering can take many forms, including:
- using proceeds of crime • mortgage fraud
- tax evasion
- terrorist financing
- criminal activity
- impersonation
Compliance
Customer due diligence (CDD) checks will need to be carried out on any new Tenants and Landlords on and from 10th January 2020. Also, if an existing Tenancy is renewed after this date letting agents will need to carry out appropriate checks on both parties.
It is an offence to trade as an ‘Letting Agent /Estate Agent’ unless registered with HM Revenue and Customs (HMRC) for anti-money laundering supervision if the business falls within the scope of the regulation.
Description and definition.
- The Customer, Landlords and Tenants and all parties involved in rental transactions of a one-off value greater than €10,000.
Risk Assessment
Due to the nature of the Letting Agency market in which we operate we have chosen to assess our risk or susceptibility to money laundering as Low on all matters.
We operate an Enhanced Due Diligence process for all High Valued Landlords and Tenants.
Our policy statement makes clear the actions we take to prevent money laundering and terrorist financing, by setting down our policies and procedures in writing. The aim of the Enhanced Due Diligence procedures that we have adopted is to establish, beyond reasonable doubt, key identifiers that help combat fraudulent and money laundering activity in the property market.
This document details how to highlight and escalate concerns via a defined chain of command, creating documented audit trails.
All our Staff are aware that they must report any suspicious activity to our Nominated Officer who has full autonomy to carry out their duties. We aim to make our procedures non-intrusive and easy for our staff to comply with the Letting Agency Anti Money Laundering obligations. All our Staff understand that they carry Personal Liability and that they may be committing a crime if they do not comply with our Policy and Procedures Document which supports the HMRC regulations. All our staff are aware that they could incur an unlimited fine and/or a prison term of up to two years if:
- they agree to or are involved in committing a crime
- a crime is committed because of their neglect It is important that all our staff read, understand, and implement the Policy Procedure and they will be provided with regular training on Anti Money Laundering. Policies and Procedures for Customer Due Diligence Vendor Documentation, Records and Policy Prior to marketing a property we ensure that every Vendor is known to us and satisfies our AML checks by completing, recording, and storing all necessary details.
Where a Landlord or a Tenant enters into a rental contract, whether AST, Written Occupational Contract which has a one off payment value greater than €10,000 it is the company’s policy to ensure that all parties to the transaction are known to us and all satisfy our AML checks by completing, recording and storing all necessary details.
To demonstrate Enhanced Due Diligence, we will complete the following checks for all Landlords and Tenants.
- Landlord and Tenant Information Form
- Verifying and retaining copies of all Landlord’s and Tenant(s) passports and/or driving licences
Our staff have been trained to recognise these suspicious activities and act in accordance with the necessary procedures.
Identifying and Reporting Suspicious Activity
The first action by any staff member who suspects suspicious activity is to escalate the matter to the Nominated Officer. Under no circumstance should any of the parties be informed before, during or after any investigation whether formally reported or not. The Nominated Officer should assess any report and decide whether to escalate the matter. The matter could be escalated to an approved Lawyer or where the seriousness or level of potential risk is high, should be escalated to the NCA via a Suspicious Activity Report under the Proceeds of Crime Act or the Terrorism Act.
Storage
Our records are held securely and electronically for 5 years from the date of the transaction. Our staff will ensure that all photographed or photocopied or scanned passport and/ or driving licence records are disposed of in a secure manner and/ or stored in secure lockable filing cabinets in line with the Data Commissioner’s guideline found at https://ico.org.uk/for-organisations/guide-to-dataprotection/ Staff Awareness Senior Managers Our Senior Managers understand that they are personally liable for their conduct AND that of the staff employed by the company, or anyone representing the company. Our staff and senior managers are aware that they must report any suspicious activities during the entire transaction process. Staff Personal Liability Our staff are familiar with our Policy and Procedures Document and of their personal responsibility and liability within these regulations.
A copy of “Summary of Money Laundering Regulations 2007” based on HMRC procedures, is available by highlighting and clicking this search link.
An offence is committed if one knows or suspects that they are dealing with proceeds of crime or money laundering without reporting it. It is an offence to fail to report suspicious activity. Letting Agents’ businesses are vulnerable to Money Laundering, Criminal Activity and Terrorist Financing.
Our Policy and Procedures Document details the steps we take to prevent our services being used for money laundering. Areas of Particular Concern
- Letting agent being offered bribes, for example in relation to valuations or planning applications
- where the source of funds may be a result of mortgage fraud by a customer or mortgage broker
- landlords not complying with their legal obligations
- attempts to pay fully or partially for the purchase of a property from the proceeds of criminal activity like internet fraud, drug dealing, prostitution, or human trafficking • acceptance of disproportionate corporate hospitality
- use of a client fund account for non-property transactions or other funds handling services
- tenants attempting to sell properties they have rented
- passing off stolen property at auctions Customers of Particular Concern
- how the customer comes to the business, for example non face to face customers, occasional transactions, the pattern of behaviour and any changes to it and corporate customers, partnerships, or trusts
- if you undertake business in areas with a highly transient population
- the customer base may be unstable or have a high turnover
- where you act for international customers or customers you do not meet
- if you accept business from abroad, particularly tax havens, or countries with high levels of corruption, or where terrorist organisations operate
- where you act for entities that have a complex ownership structure or a cross-border element
- payments that are made to or received from third parties Suspicious Activity
- checking the customer’s identity is difficult
- the customer is reluctant to provide details of their identity or provides fake documents
- the customer is trying to use intermediaries to protect their identity or hide their involvement
- no apparent reason for using your business’s services – for example, another business is better placed to handle the size of the transaction or the location of the property • part or full settlement in cash or foreign currency, with weak reasons
- the property value doesn’t fit the customer’s profile
- the customer has not viewed the property or has only seen it on the internet
- unusual speed or requests to expedite transactions unnecessarily
- a sudden or unexplained change in ownership
- the immediate resale (flipping) of property at a higher value
- the customer requests payment to a third party who has no apparent connection with the customer
- an unusually big cash or foreign currency transaction, and the customer will not disclose the source of the funds
- unusual involvement of third parties, cash gifts, or large payments from private funds, particularly where the buyer appears to have a low income
- you’re asked to hold a big sum in your client account, then refund it to the same or a different account
- proceeds of a sale or rental sent to a high-risk jurisdiction or unknown third party
- successive transactions, especially of the same property, with unexplained changes in value
- unusual source of funds, for example complex loans or unexplained charges
- the owner, landlord or builder isn’t complying fully with their legal obligations, perhaps to save money
Anti-Laundering Reporting Officer
Tracy Wilcox – M 07795103686
Email: enquiry@kingsmarkproperties.co.uk
Under The Money Laundering and Terrorist Financing (Amendment) Regulations’ 2019, the Letting Agency Kingsmark Properties does not meet the definition of a letting agency activity having dealings with a rent threshold of £10,000 rent per property per month. Therefore a risk factor is low. However, It is good practice to maintain the above policy and procedures.