UK real estate agents reminded of need to register with money laundering scheme

 
Publishing it interim policy on imposing financial penalties on estate agents and certain credit lenders, the OFT points out that those who fail to do so will be subject to fines that start at £2,000 and increase by £1,000 for each additional unregistered premise.
 
Where the OFT believes estate agents and certain credit lenders are not registered but are carrying on a supervised activity, it will give them 21 days to apply for registration or to explain why they are exempt from registration, before notifying them of the intention to apply a financial penalty.
 
‘Estate agents and certain credit lenders have an obligation to comply with statutory obligations under the Money Laundering Regulations 2007, which includes registration with the OFT. Where businesses choose to ignore OFT warnings and do not register, we will impose civil financial penalties,’ said Mario Tsavellas, OFT director of anti-money laundering.
 
‘It is vital that the OFT continues to identify those who should register, so that the OFT can supervise them effectively and reduce the risk of money laundering and terrorist financing in these sectors,’ he added.
 
The number of agents who have not signed up to the OFT’s anti-money laundering register is unknown, but by March, only 5,684 applications for the register had been received. Estate agents are widely angry about the need to register, having consistently pointed out that they do not handle money, unlike letting agents who do not have to register with the OFT.
 
The Money Laundering Regulations 2007 came into force on 15 December 2007 and 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.
 
Prior to 15 December 2007, the businesses supervised by the OFT had to comply with the Money Laundering Regulations 2003 but did not have a supervisory body.
 
But 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 FSA or supervised by HMRC as a money service business.