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Overseas

Overseas anti money laundering

Estate agents assisting with buying or selling overseas property now subject to Anti-Money Laundering regulations

Tribunal upholds OFT fine on estate agent for trading while unregistered

86/12    3 October 2012

Changes to the Anti-Money Laundering (AML) Regulations mean that UK-based estate agents who assist clients to buy or sell overseas property must comply with the regulations from 1 October 2012 and register as soon as possible. Those that fail to do so may be subject to a fine or face prosecution.

The OFT also welcomes the decision of the First-Tier Tribunal to dismiss Sussex-based estate agent, Mansell McTaggart Limited's appeal against a £3,000 fine imposed by the OFT for carrying on estate agency work while unregistered. The Tribunal found that the penalty imposed in this case was appropriate. Mansell McTaggart Limited is now registered with the OFT under the AML Regulations.

To date around 7,000 estate agents and 6,000 consumer credit lenders have registered with the OFT under AML regulations.

David Fisher, OFT Director of Anti Money Laundering, said:

'The changes to the Regulations will help to deter, detect and disrupt financial crime by reducing businesses' vulnerability to being used for money laundering or the financing of terrorism.

'It is important that businesses comply with the Regulations and register with the OFT. As shown by our action against Mansell McTaggart Limited, where they do not, we will impose penalties.'

NOTES 

  1. The Money Laundering Regulations 2007 came into force on 15 December 2007. The Regulations implement the Third Anti-Money Laundering Directive. The aim of the Regulations is to reduce the risk of supervised businesses being used for money laundering or terrorist financing. Businesses have to apply measures such as verifying customer identity, training staff and reporting suspicious activity to the Serious Organised Crime Agency. 
  2. Under the Regulations, requirements are placed on regulated businesses to verify their clients' identity and monitor and report suspicious activity to the Serious Organised Crime Agency. 
  3. UK-based estate agents who assist clients to buy or sell overseas property must comply with the regulations from 1 October 2012 and register by 31 March 2013, or be subject to a fine or face prosecution. 
  4. Since 15 December 2007 the OFT has been responsible for supervising those businesses who carry on a supervised activity, namely estate agents and Consumer Credit Financial Institutions (CCFIs). CCFIs are consumer lenders who are not authorised by the Financial Services Authority or supervised by HM Revenue & Customs as a money service business. 
  5. In July 2009, the OFT launched its AML registration scheme. Existing businesses should have registered by 31 January 2010. Estate agents dealing with property overseas will have until the 31 March 2013 to register with the OFT. Carrying on an estate agency business or business as a CCFI without being registered is a breach of the Regulations for which the OFT may impose a civil financial penalty. It is also a criminal offence which could result in prosecution. New entrants to the OFT's supervised sectors must register with the OFT before trading in supervised activity. 
  6. See more information on the OFT's anti-money laundering regime under the Regulations.
  7. Download information on registration (and application forms) (pdf 194kb).

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