Money Laundering Regulations 2017
On 26 June 2017, the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 came into force. The Regulations implement the EU’s 4th Directive on Money Laundering (often called 4MLD), which replaces the Money Laundering Regulations of 2007.
However, the new regulations aim at a far more risk-based approach.
The Regulations apply to many businesses including:
- Estate agents, which includes those with a lettings department;
- Credit institutions;
- Financial institutions;
- Tax advisors.
They do not however apply to those engaging in financial activity on a very occasional basis, with a turnover of less than £100,000.
Criminals use money laundering to clean money and disguise any obvious links to criminal activity and in the property sector laundering it can take many forms which include:
- Buying a property using the proceeds of crime and selling it on to give the criminal a legitimate source of funds;
- Letting agents undertaking the sale of leases for a premium;
- Paying a large deposit and then reclaiming it later.
At the moment, the regulations will not apply to ordinary letting work but the government will reconsider this later in 2017.