property industry money laundering

Property Industry – Flag It Up Extended

The UK government has now expanded its Flag It Up campaign to the property sector. Until recently, the Flag It Up campaign was directed specifically toward the financial (banking and accountants mostly) and legal professions. The campaign, however, does cover all professionals and businesses. Awareness is now being raised in the property industry too.

Recognising the Signs

Professional bodies such as the Central Association of Agricultural Valuers, The Royal Institute of Chartered Surveyors, and the National Association of Estate Agents will now be working with government agencies to spot signs of money laundering.

The campaign aims to help professionals that work within these bodies to identify the signs and encourage reporting. Reinforcing their legal and moral obligations to do so will do much more to protect the UK economy where it is estimated that hundreds of billions of pounds are laundered every year.

The property sector is now receiving support and exposure to the campaign since it was first introduced to the legal professions in 2014. In 2015, the financial sector has been targeted to tackle this growing problem. The support is being provided by HMRC for supervising estate agencies under the money laundering regulations.

Only 710 reports of suspicious activity were submitted by property agents during the period 2017/18 tax year. By comparison, accountants reported 5,036 and independent legal professionals reported 2,660 reports. The disparity is obvious and the move appears to be educational rather than aggressive.

Using social media as a promotion tool, together with digital advertising and exposure at industry conferences, the campaign encourages reporting by estate agents. When spotting suspicious activity, they are able to submit a suspicious activity report (SAR) to the National Crime Agency (NCA) when certain signs are spotted.

These include evasive or contradictory explanations about sources of large sums of money. This is also flagged by the use of multiple bank accounts when dealing with a single agency.

New Consequences for Property Industry

Failure to comply with money laundering regulations can result in estate agents being barred from trading. In some cases, they may even face prosecution if compliance failures come to light. Deterrents include unlimited fines or a possible custodial prison sentence of up to two years.

Simon York, of HMRC’s fraud investigation service, has been quoted as saying, “HMRC is determined to crack down on money laundering. As the supervisor of estate agencies under money laundering regulations, HMRC works closely with the sector to help them tackle this crime”. Simon York is director of this service.

As the Flag It Up campaign extends to the property industry, a clear message is being sent from government and the sector. The door is closing on money laundering. The campaign efforts will be bolstered from both sides, government and industry.

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Property Industry – Flag It Up Extended 18003

Property Industry – Flag It Up Extended 18003

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