Agents across the UK are being urged to flag up suspicious activity as part of a new Government campaign to crack down on criminals who may be using dirty money to buy properties.
NAEA Propertymark have teamed up with the Government and other professional bodies including the Central Association of Agricultural Valuers, the Royal Institution of Chartered Surveyors to help agents spot the signs of money laundering and reinforce their legal and moral obligations to report suspicious activity.
The Flag It Up campaign has been targeting solicitors since 2014 and accountants since 2015, and is now expanding for the first time into the property sector with support from HMRC.
Money laundering in the UK potentially runs to hundreds of billions of pounds per year, according to the National Crime Agency’s National Strategic Assessment 2018. Not only is it an illegal activity in itself, as it seeks to legitimize the proceeds of crimes, but it is also a pathway for further crimes such as modern slavery, fraud and corruption.
Ben Wallace, Minister for National Security and Economic Crime, said:
Criminals who seek to use this country as a place to launder money should be in no doubt that they have nowhere to hide. Estate agents are a crucial line of defence against them and that’s why they’re under a legal – and moral – obligation to file a report when they spot something amiss. It’s wrong to think of money laundering as a victimless crime. Those with dirty cash to clean don’t just sit on it – they reinvest it in serious organised crime, from drug importation to child sexual exploitation, human trafficking and even terrorism.”
Whilst the campaign is particularly aimed at the high-end real estate sector, which is vulnerable to money laundering as luxurious properties in the UK are seen as a badge of wealth and respectability, it is important for all agents to know the signs.
Over the period April 2017 to March 2018, estate agents submitted just 710 suspicious activity reports compared with accountants submitting 5,036 and independent legal professionals submitting 2,660. The campaign therefor aims to raise awareness among estate agency and urge agents to file a Suspicious Activity Report (SAR) to the National Crime Agency when they spot signs such as a client being evasive or contradictory about the source of a large sum of money or using many different bank accounts.
Failure to comply with money laundering regulations could result in estate agents being prevented from trading or even face unlimited fines or a prison term of up to two years.
Simon York, Director of HMRC’s Fraud Investigation Service, commented:
HMRC is determined to crack down on money laundering, and as the supervisor of estate agents under money laundering regulations, works closely with the sector to help them tackle this crime. The extension of the Flag It Up campaign to the property industry will help bolster our efforts and sends a clear message from both the Government and the sector that the door is closing on money laundering.”
NAEA Propertymark Chief Executive, Mark Hayward, said:
Both small and large estate agencies are susceptible to criminal activity. Houses bought with laundered money often sit empty, taking homes away from the market that could be used for families and having a further negative impact on the wider community.
“By partnering with the campaign, we are pleased to see the Government engaging with the sector to support estate agents in their legal anti-money laundering obligations. As a professional body we play an important role in ensuring our estate agent members are educated and equipped to put in place adequate procedures to safeguard against risks. Estate agents must constantly consider the level of identification, verification and monitoring needed to check for money laundering. Taking steps to identify customers is key and where agents identify suspicious activity they must report it.”
Flag It Up complements other action taken by the Government to target dirty money such as the Criminal Finances Act and tools like Unexplained Wealth Orders and Account Freezing Orders.