Brexit heightens risks for agents who fail key compliance tests

An assessment by a risk solutions firm shows that estate agents are on average just 53 per cent of the way through their Fifth Anti-Money Laundering implementation plans.

This is despite the directive coming into force over a year ago, meaning that agencies are at risk of penalties from the regulator for non-compliance, as well as potentially allowing illicit activity to go undetected.

These findings, from LexisNexis Risk Solutions, are based on a survey over 875 compliance professionals across areas such as estate agency, banking, accountancy, lending, wealth management and legal sectors, and seek to showcase how businesses are coping with the current Anti Money Laundering framework.

Despite not being fully compliant yet, estate agents were most optimistic about how impactful the directive would be in their ability to detect and deter financial crime, with 77 per cent stating that it would have a net positive impact, higher than the research average of 60 per cent.  

LexisNexis Risk Solutions says that therefore a lack of guidance on how to comply with the regulation is likely to be the cause of estate agents’ apparent difficulties in implementing the directive.

The consultancy says that additional guidance is particularly important given that estate agents predict that more anti-money laundering  regulation is imminent due as a result of Brexit. Some 89 per cent of agents are expecting to see more AML targeted regulation as a result.

The consultancy’s UK and Ireland director Nina Kerkez says: “It appears that compliance professionals in the estate agent industry have been on an uphill battle to try and [sic] meet the directive’s requirements. It’s not the case that estate agents are resistant to the changes, far from it in fact; they’re able to see the value such regulation can bring to fighting financial crime. Instead, it appears there is a disconnect between the regulator and the support the industry requires to meet its obligations.

“To overcome this issue, we need to see better collaboration from the regulator and the wider private sector, to ensure that all industries are aware of their obligations, and the steps they need to take to ensure compliance.”