HMRC has published its list of businesses that have been fined for breaches of anti-money laundering regulations between April and December 2021.
Of 75 firms fined by HMRC 39 are estate agency businesses (EABs) making up 52% of AML breaches.
95% of EABs fined were for breaches of regulation 56, Requirement to be registered, which ranged from £2,500 to £52,000. The remainder of fines were issued for breaches of regulations 18, 19, 27, 28, 30, 40, not carrying out risk assessments, having correct policies, controls and procedures, conducting due diligence, record keeping and timing of due diligence.
The number of fines issued shows HMRC is keeping true to warnings that they will crack down on firms who fail to comply with anti-money laundering rules. With the Ukraine war and imposition of more sanctions AML will become more of a priority and HMRC can be expected to be more active.
Staying Compliant
Some simple tips to make sure you do not fall foul of the rules are:
- Make sure you have registered with HMRC for money laundering supervision and you renew your registration every year. If you are not sure how to do this then your professional advisors may be able to help, or engage a professional firm such as LondonCDD to assist.
- EABs are aware that they must complete AML checks on clients at onboarding, but few realise that you must monitor the information you know about your client throughout the transaction. You must keep your files up to date with new information and record all steps you have taken.
- Keep your files organised and make sure that all mandatory documents are included. Do not just ‘dump’ ID documents into a folder and think the job is done. All relevant documents, customer ID, PEP & Sanctions checks, AML risk assessment, Terms of business, Memorandum of sale with any evidence you have collected relating to source of wealth and funds should be present and easily read.
- Keep a written risk assessment of each transaction. HMRC must understand how you have come to decisions on the amount of due diligence you apply. Your AML risk assessment should explain the factors you have considered, how risk has been mitigated and the actions you have taken.
- Have your AML due diligence files independently reviewed. This is an important step in any compliance regime. People make mistakes and the sooner this is spotted and corrected the less impact it can have on your business. Larger firms may be able to rely on other departments to check their work, but for the majority of small or sole operator firms a professional AML compliance firm like LondonCDD can check you are following the rules help you improve where you are falling short.
- Maintain your AML training. The Regulations state that firms should remain up-to-date with AML rules and procedures. Annual AML training and up-dates throughout the year should be maintained. Make sure you keep records of all training undertaken.
How londonCDD can help
LondonCDD is a professional AML compliance firm dedicated to EABs and can assist with all of your AML concerns. From transaction AML support to a fully outsourced AML solution LondonCDD contact LondonCDD to see how we can help.
