HMRC and the Treasury have been urged to improve guidance on anti-money laundering (AML).
Agency trade body Propertymark has suggested that while most agents carry out AML checks, there is confusion about how to complete customer due diligence.
Responding to a Treasury consultation on how to improve AML regulation, Propertymark said: “Much of the guidance provided by HMRC focus on when to carry out checks and not how they can be completed effectively.”
Its consultation response said agents require more prescriptive guidance with practical examples, so they better understand their responsibilities.
Analysis by the trade body found more than 95% of estate agents carry out customer due diligence on every new client
Propertymark said: “Agents understand their AML duties, what they struggle with is exactly how to, especially for more difficult requirements such as identifying beneficial owners and sources of funds. Furthermore, 96% of surveyed members welcomed more prescriptive guidance.”
It suggested that HMRC should define low-risk scenarios and said more guidance on digital IDs was needed.
Half of the surveyed Propertymark members said they do not currently accept digital identities for AML checks, citing a lack of trust in third-party services, the cost of digital checks, and the fact that physical ID is accessible to nearly everyone.
However, 84% stated that comprehensive guidance and a central database which could help screen out fakes would encourage them to start using digital identities.
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I'm sorry. I think I must be missing something here! There is a plethora of AML, ID verification & source of funds providers. They are not expensive and so much more accurate and complete than looking at a persons passport or "physical ID".
The beneficial owner is more complicated when a title is owned by a company/trust etc. but not impossible to establish. Start using a provider that can offer a comprehensive solution and work out the more challenging aspects as you come across them, as these are far fewer than the majority of privately owned titles. Get the basis right and then tackle the complicated stuff.
Whey cheaper than a fine!
This would be really helpful. I hope that in addition to the more complex cases; that examples can be given of more low risk cases. I.e A first time buyer with 5% deposit getting a mortgage and using a solicitor you know or someone buying a retirement flat (no money launderer would buy one of them!) No common sense is allowed.
There is too much emphasis on the maximum tests one can do. How many agents actually deal with politically exposed people, for example.
This is where tech helps.
Get the tech in and train someone or two to be the AML person. Who to train them? There are webinars galore or your local friendly Solicitor.
PEP and Sanctions List check MUST be completed for buyer and seller.
Source of funds of the buyer is clarified by asking-and checking-how was the cash accumulated.
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