Anti Money Laundering
Since 2017 Estate Agents in the UK have been required to demonstrate that they ‘know their customer’ by applying anti-money laundering measures to demonstrate due diligence with all new, and continuing landlord customers; including all tenants paying more than £8,800 (10,000 Euros) in rent each month.
What is Money Laundering?
Money Laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of criminal acts, in an attempt to make the money lose its criminal identity & appear legitimate. 2017 Money Laundering Regulations came into force on 26th June 2017 and were updated with the intention of detecting, deterring and disrupting money laundering efforts and the funding of terrorism.
An Agent is responsible for ensuring that they ‘ know their customer’ and as such should be able to demonstrate CDD (Customer Due Diligence) for every Purchaser and Vendor (Estate Agents), and for Tenants paying over £8800 rent per month (Letting Agents)
CDD is applied on a risk-sensitive basis, dependent on the type of customer, their business relationship and the nature of the transaction and each Agent will need to ensure they have at least verified the identity of the person they are doing business with before the establishment of a business relationship or transaction takes place.
For Vendors (& landlords) this would be at the point the Agent is instructed for a let, and prior to marketing the property.
For Purchasers ( & Tenants), this would be prior to accepting the Offer ( on presentation of the offer to the Vendor, or Landlord where rent is > £8800 per month))
Customer Due Diligence (CDD) Requirements
The Agent should be able to:
- Identify the Client
- Verify the Identity using documentation or data from a reliable source
- Identify ultimate ownership and beneficial interest in the transaction