Author: Nicola Sharp 7 February 2023
The data for the first quarter of the 2022-23 financial year, provided by Credas Technologies, shows that AML fines issued by HM Revenue and Customs (HMRC) in the estate agency sector totalled £304,023.
This figure for the quarter equates to 44% of the total fines for the whole of the previous financial year. The average AML fine in the first quarter of 2022-23 was £3,815 – a 6% increase on the preceding year.
The estate agency sector accounts for the largest proportion of AML fines issued by HMRC - 45.5% - and has paid out the second-largest total in penalties since 2017. Its total payment of £1.6 million was second only to the money services industry, which has had to pay £4.7 million in penalties since 2017.
As estate agents are dealing with large transactions on a daily basis - and because buying property is often used as a means of laundering money – those working in the sector have to meet AML obligations and are subject to HMRC supervision. This means that estate agencies must conduct enhanced due diligence checks to assess the potential risks of fraud and money laundering.
While a large number of the fines issued may have been due to oversights and mistakes rather than any intention to avoid money laundering obligations, the fact that the penalties have been imposed indicates the HMRC’s intention to crack down on AML failings.
It is important, therefore, that estate agencies make sure their AML policies and practices are up-to-date and implemented properly. This requires them to fully understand their obligations under the Money Laundering Regulations, conduct all necessary Know Your Client (KYC) and enhanced checks, and meet their ongoing monitoring responsibilities.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.