Regulation & Law

Nigel Lewis

The CEO of a leading anti-money laundering firm has warned the government that its lack of action to implement the latest AML regulations will put many sales and letting agencies at risk.

The EU’s Fifth Money Laundering Directive came into force in July 2018 requiring all member states to transfer the Directive into domestic law by 10 January 2020.

These new regulations will have a significant impact on Know Your Customer (KYC) and due diligence processes for estate agents, brokers and introducers.

John Dobson, Chief Executive of Smartsearch, has written an open letter to Chancellor of the Exchequer Sajid Javid, asking him to “take action as soon as possible to ensure new regulations relating to money laundering are published without further delay,” it says.

Political situation

“The Treasury published its consultation on the transposition of the Directive in April but since then the political situation, and the uncertainty as to the UK’s status in relation to the EU, have regrettably served to prevent this important issue commanding the attention it deserves.

“As a result, the necessary regulations have yet to be laid before Parliament.

“It is not just big banks that are affected by the regulations: law firms, accountancy practices, estate agents and firms dealing in high-value goods are all directly affected, regardless of their size.

“The new provisions under 5MLD bring art dealerships into scope, as well as letting agents dealing with rental property over €10,000 pcm. “These businesses all need to act now to ensure they can be fully compliant.”

Dobson has also called for electronic identity verification to be made mandatory within the UK which, he claims, would significantly speed up the AML process. The new directive only asks that electronic verification is used ‘where available’.

Read more about AML.