Changes for sales agents include requirements for additional ownership checks and Enhanced Due Diligence.
Letting agents which rent our property valued at 10,000 euros or more for a minimum of one month, including both residential and commercial property, are now subject to the anti-money laundering regulations.
All new regulations must be complied with from 10 January 2020. Guidance from the Government is expected very soon.
Beneficial Owners regulations
There is a new requirement for agents to check beneficial ownership registers before establishing a business relationship with anyone in the ownership and control structure of their customers. Agents must report to Companies House any discrepancies between what they find in their Customer Due Diligence research and what is listed on beneficial ownership registers.
Where the beneficial owner of a company cannot be identified, estate and regulated letting agents must take steps to verify the identity of senior managing officials.
Customer risk factors and Enhanced Due Diligence
Property agents must now carry out Enhanced Due Diligence (EDD) where there is an unusual pattern of transactions, or the transaction has no apparent economic or legal purpose—not just on transactions that are complex or unusually large.
Where there is a business relationship or transaction with a landlord or tenant from a high-risk third country, agents must now also carry out EDD and obtain additional information on:
- The customer and customer’s beneficial owner.
- The intended nature of the business relationship.
- The source of funds and wealth of the customer and of the customer’s beneficial owner.
- The reasons for the transaction.
Property agents must obtain the approval of senior management for establishing or continuing any business relationship or transaction with a landlord or tenant from a high-risk third country.
Agents must also conduct enhanced monitoring of the business relationship, by increasing the number of controls applied and selecting patterns of transactions that need further examination.
Electronic ID methods
The regulations state that electronic identification processes are permitted where these are:
- Independent of the person whose identity is being verified
- secure from fraud or misuse
- capable of providing an appropriate level of assurance that the person being checked is who they say they are.
Sales agents who also carry out lettings
Sales agents who also carry out lettings (that will fall in the scope of the new regulations) and are already registered with HMRC, will need to inform HMRC that they carry out lettings activity. An online process to do this will be up and running in May 2020. All agents will need to comply with the Money Laundering Regulations from 10 January 2020.
From today, 10 January, all letting agents who manage properties which, individually, yield an income of 10,000 Euros per month (or equivalent) or more, must now comply with regulations set out in the Fifth Money Laundering Directive.
We have created a number of resources, forms and training options for agents and auctioneers to comply with their Anti-Money Laundering obligations.
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