Anti-Money Laundering (AML) regulations

Money laundering is the process of cleaning money which has been gained from criminal activity in order that it appears to have been legitimately acquired. In April 2018, the European Parliament passed the Fifth Money Laundering Directive which contains amendments to the Fourth Money Laundering Directive on the prevention of money laundering and terrorist financing.

These regulations affect estate agent businesses which includes property auctioneers or high value dealers. Member States, including the UK, must implement the new rules into their national legislation by 10 January 2020.

Why is it relevant to property auctioneers and high value dealers?

In the property sector, it often involves purchases using the proceeds of crime and selling it on or renting it out to give the criminal an apparently legitimate source of funds. In the high value dealers’ sector it can include purchase of items such as jewelry and cars.

HIGH VALUE DEALERS

A high value dealer is a business (firm or sole trader, who or whose employees) that deal in goods or services and makes or accepts cash payments over the value of €10,000 (or its equivalent in another currency) whether that is in a single payment or a series of payments.

HMRC guidance

Mark Hayward

Mark Hayward
NAEA Propertymark Chief Executive

Quote mark

'High Value Dealers must do more than just be wary of buyers paying with cash or using intermediaries. They need to actively train staff on implementing the Money Laundering Regulations'.

 

Fifth Money Laundering Directive

The rules are extended to persons trading or acting as intermediaries in the trade of works of art, including when this is carried out by art galleries and auction houses, where the value of the transaction or a series of linked transactions amounts to €10,000 or more.

WHAT DOES THIS MEAN?

Property auctioneers and high vale dealers must put in place procedures to anticipate and prevent money laundering and help reduce the risk that criminals may exploit your business for financial crime.

How to comply

REGISTER

It’s an offence to trade as a high value dealer or an estate agency business (which includes property auctioneers) unless you’re registered with HM Revenue and Customs (HMRC) for anti-money laundering supervision. More info...

MONEY LAUNDERING REPORTING OFFICER (MLRO)

There is a requirement under the regulations to have a nominated person within your business to act as a Money Laundering Reporting Officer (MLRO) and where applicable also nominate a Deputy MLRO. We can provide our members who are MLROs with legislative updates and other useful information. More info...

PROCEDURES

Prepare a comprehensive written policy statement to show how your business will manage the risks and detail procedures to prevent money laundering. Train and support staff to understand and implement these policies. Finally, undertake an Anti-Money Laundering risk assessment covering your clients, your business and how it operates.

HMRC guidance

Know your customer...

Viewing art

CUSTOMER DUE DILIGENCE (CDD)

It's a legal responsibility to undertake CDD on the buyer and seller before establishing a business relationship or carrying out a transaction. We've designed a form to help. Download...

Facial Recognition

PROPERTYMARK PASSPORT

Uses biometric checks—like those used at UK Border Control—to assess the authenticity of ID documents, regardless of type or country of origin. More info...

Passport

HOME OFFICE ID GUIDANCE

This Home Office guidance on examining identity documents will assist you in spotting forgeries and altered document. More info...

 

Making Suspicious Activity Reports (SARs)

If any staff know or suspect a potential customer is engaged in money laundering, they must raise an internal report to your MLRO. Basic examples of suspicious activity include; difficulty getting paperwork off the customer to complete due diligence checks, fake or incomplete paperwork, it difficultly establishing the beneficial owner, requests to pay via installments in attempt to bring payments under the thresholds.

The MLRO will need to assess whether there are grounds to pass the report onto the National Crime Agency (NCA). The NCA will determine whether you can proceed with the transaction. Contact HMRC for advice about money laundering and how to report suspicious transactions. If HMRC need to contact you about anything confidential they will reply by phone or post.

NCA website

Training, events and webinars

Training courses

TRAINING COURSES FOR ALL LEVELS

Foundation, Intermediate and Advanced level courses on AML, which are discounted for members.

More info...

Workshop

FREE AML WORKSHOPS AND WEBINARS

We host workshops across the country (free for members) and free webinars to ensure that you understand your obligations.

More info...

AML guide

HOW TO COMPLY GUIDE

Our AML guide will help you get to grips with your responsibilities. Download a copy from the members' area; they will also be given out at NAEA Propertymark Workshops.

More info...