If you’re lucky enough to deal with or own property which generates a monthly rent of 10,000 euros (£8,500) or more then the new AML changes are something you need to start implementing…from today!
Its here! – the fifth EU money laundering Directive comes into force today with significant challenges and implications for letting agents.
The new rules apply from today after being passed through parliament just before the Christmas Break and are summarised below:
1. Letting agents must carry out customer due diligence on landlords and tenants where for a period of a month or more, and at a rent which during at least part of that period is, or is equivalent to, a monthly rent of 10,000 euros or more; currently equivalent to £8,500.
2. Where the customer is a legal person, trust, company, foundation or similar legal arrangement estate and letting agents must take reasonable measures to understand the ownership and control structure of that legal person, trust, company, foundation or similar legal arrangement.
3. All letting agents must register with HM Revenue & Customs for AML supervision if they are dealing with monthly rent of 10,000 Euros or more. If agents are already registered with HMRC for sales business they need to advise of their lettings work too, however, there is no extra charge;
4. Enhanced due diligence measures must include: obtaining additional information on the customer and on the customer’s beneficial owner; additional information on the intended nature of the business relationship; information on the source of funds and source of wealth of the customer and of the customer’s beneficial owner; obtaining information on the reasons for the transactions;
5. The territorial extent and application of the Statutory Instrument apply to all the United Kingdom.
David Cox, Chief Executive of ARLA Propertymark, says: “Despite the HMRC’s online register not being operational until May 2020, letting agents will need to comply with the regulations from 10th January 2020 and if they’re found to be non-compliant with the regulation’s agents may face civil penalties or criminal prosecution.“However, irrespective of whether agents fall under the definition of regulated businesses with HMRC for AML supervision, Propertymark recommends it’s best practice for all letting agents to carry out Customer Due Diligence (CDD) on all their customers.”
