Sixty-eight businesses found not complying with money laundering rules
Dozens of estate agents have been fined more than £500,000 for infringing anti-money laundering rules, HM Revenue and Customs (HMRC) announced this week.
In a statement, HMRC named 68 estate agents that were fined a total of £519,645 for not complying with rules designed to stop criminals laundering money from illegal activity.
The fines included the first prosecution of an estate agent for trading despite not registering with HMRC.
Felix Uwuigbe, director of Century House Estates Ltd in London, was banned from acting as an estate agent for two years in addition to being sentenced to 120 hours of unpaid community service after being convicted of trading for three months while unregistered.
Up to 175 businesses received fines totalling more than £2.1 million for failing to comply with money laundering regulations, representing a substantial increase over the previous number. In an earlier list released in May, 147 businesses, including 41 estate agents, received penalties totalling almost £800,000.
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In reference to the latest operation, Nick Sharp, HMRC’s deputy director of economic crime, said: “We are determined to create a level playing field for businesses who play by the rules. That means taking action against the minority of businesses who fail to fulfil their legal responsibilities under the money laundering regulations.
“Money laundering is not a victimless crime. Our regulations are there to protect businesses from those criminals who would prey on their services to wash their dirty money. Serious and organised crime costs the UK billions of pounds every year and our anti-money laundering (AML) supervision is a vital tool in combatting that.”
Martin Cheek, managing director of SmartSearch, added his voice, saying that the latest round of fines and ongoing pattern of non-compliance showed there was an urgent need to improve standards in the sector.
“Once again, estate agents unfortunately find themselves in the spotlight for compliancy failures…it’s also a wake-up call to all regulated businesses,” he said.
“As HMRC continues to take action against those who ignore their legal responsibilities, it almost becomes a question of when, not if, for those who lack fundamental AML processes. Without doubt, the case for digital onboarding, electronic verification and enhanced due diligence has never been so vital.”
He said more than £90 billion was being laundered through the UK, and that the property sector was on the front line in the war against money-laundering.
“The sector has long been a target for criminals and exposed persons to filter dirty money and an urgent response is needed,” he added. “Rising to the challenge will undoubtedly take a culture change.”
According to the National Crime Agency’s National Strategic Assessment, serious and organised crime costs the UK economy at least £37 billion a year and involves more than 4,500 known organised crime groups.
For its part, Propertymark, a national association representing real estate agents, issued a statement, saying that it had responded to the HMRC’s action by opening compliance cases “against a small number of members”.
It revealed that five agents on the HMRC list were Propertymark members that had been issued penalties for money laundering violations committed between January and March this year.
It said: “Propertymark encourages members to fully engage with them and the compliance review process in order to maximise the benefits. Ultimately, Propertymark is here to help and support your agency, continue to raise standards and preserve the long-term health and prosperity of the profession.”
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As one of 25 anti-money laundering supervisors in the UK, HMRC said it was investigating more cases of businesses failing to register while trading, which could lead to prison sentences of up two years, as well as an unlimited fine.
Last month, the government published details of its Economic Crime and Corporate Transparency Bill, intended to tackle fraud and prevent the abuse of limited partnerships for money laundering and other illicit purposes.
The bill is also aimed at ensuring that legitimate investors benefit from simplified filing requirements and a more reliable companies register to inform business and lending decisions.
