Money Laundering

Money Laundering

The Fifth EU Money Laundering Directive is now in force.

The new rules apply from the 10Th January 2020, irrespective of the Brexit situation, and mean:

- 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;

- 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;

- 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;

- 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;

- The territorial extent and application of the Statutory Instrument apply to all the United Kingdom.

And for deposits there are further considerations to be taken into account as Jerry Walters, managing director of AML compliance consultancy Financial Crime Services, explains, "Under the Fifth Directive every business must now ensure they have robust client due diligence in place to establish the authenticity of deposits, prior to accepting them."

In addition, the new directive states that lettings agents must have comprehensive AML written policies and procedures in place, that they agree to undertake a firm-wide Risk Assessment and ensure that all staff have recognised AML training.


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