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5th Anti-Money Laundering Directive

10th January 2020

From today, 10 January 2020, all letting agents throughout the UK who manage properties with an individual monthly rental of 10,000 Euros per month (or equivalent) or more must comply with changes in introduced by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019  https://www.legislation.gov.uk/uksi/2019/1511/made/data.pdf

The main development these Regulations introduce is the expansion of anti-money laundering requirements to include letting agents.

What do letting agency firms need to do to comply?

Letting agents who fall under the scope of the Regulations must comply with them. Compliance is linked to the requirements of the supervisory authority, HMRC, who have not yet published guidance. The HMRC online registration system for firms is not yet operational.

Letting agency firms who are already registered with HMRC for Anti-Money Laundering (AML) supervision for sales will need to advise HMRC that they carry out lettings. Those businesses that are solely letting agents and fall within the Regulations will need to ensure the principals, directors or partners obtain approval from HMRC to act in such a capacity, and ensure the business registers with HMRC.

The deadline for applications to HMRC is 10 January 2021.

Customer Due Diligence (CDD)

Where agents fall under the Regulations, they will be required from 10 January 2020 to carry out CDD on landlords and tenants, guarantors and permitted occupiers of properties. It is anticipated that the HMRC guidance will outline in detail how this will work in practice, but it is expected it will follow similar requirements that estate agents are required to conduct under AML rules. This means carrying out identification and verification checks on clients.

The changes also outline additional steps to be taken where enhanced due diligence (EDD) must be carried out on sellers or buyers who are resident in one of the countries assessed by the EU as “high risk third countries”. There are currently 16 such countries.

Once the guidance from HMRC is published it will give a clearer understanding of the practical steps regulated letting agents will need to take.

safeagent offers Anti-Money Laundering training, as part of our series of CPD courses. The AML course is fully online, and introduces the basic knowledge required for an understanding of law relating to money laundering and how to recognise suspicious activity. Find out more

 

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