Anti-Money Laundering: Senior Manager Responsibilities.

This is the second in a series of articles on mitigating money laundering risk in property transactions. Today’s article is about the role and responsibility of senior managers in the property market.

Who falls under the scope of HMRC regulation?

Estate agents and businesses carrying out estate agency work must register with HMRC. Further, HMRC notes that for any estate agency business “senior managers are personally liable if they don’t do everything they need to do to protect their business from money laundering and terrorist financing.”

As far as HMRC is concerned, senior managers include:

Directors, Managers, Secretaries, Chief Executives, Partners in Partnership or Sole Proprietorships, and/or members of a management committee carrying out similar work.

HMRC holds managers personally liable if a crime is committed because of neglect. Penalties can include unlimited fines and a prison term of up to two years.

How can you mitigate this risk?

Let’s get started with what a manager at an estate agent needs to be doing. In sum, manager responsibilities range from establishing good money laundering practices to carrying these practices forward on an ongoing basis.

Minimum requirements include:

  • Carrying out a risk assessment of your business;
  • Preparing a policy statement;
  • Developing systems and procedures to show how the business will manage the risks of money laundering and terrorist financing;
  • Training enough staff and implement systems to deal with money laundering; and
  • Monitoring effectiveness and make improvements when required.

The first element is management-focused and making sure that you have responsibilities decided, policies in place, and staff trained. The second is implementation through systems that work.

For lower risk estate agents on a high street in a smaller town, the likely risks revolve around fraud and tax evasion. For estate agents in metropolitan regions, there may be a need for better client diligence as clientele may be more international and/or represent a higher net worth.

In my next article, I will delve deeper into assessing business risk. However, if you have any questions in the meantime, please feel free to visit our website.

This article does not constitute legal advice and should not be construed as such. Thanks to Christine Matthews for the image.

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