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Estate agents ramp up anti-money laundering checks

There has been a significant surge in anti-money laundering (AML) checks carried out by estate agents, as reported by Credas Technologies. In the first quarter of 2024, 409,265 AML checks were conducted, a 59% increase compared to 257,082 in the same period last year. This rise reflects a better understanding of money laundering regulations and the impact of substantial fines.

Addressing the AML Challenge
The UK is estimated to have at least £88 billion of illicit funds laundered annually. Under UK law, estate agents must perform AML checks in accordance with HMRC regulations. These checks include identifying the source of funds used for property purchases and conducting identity checks on clients. If an estate agent suspects money laundering, they are obligated to report it to the National Crime Agency.

Tom Barnett, CEO of Credas Technologies, commented on the property market’s recovery: “Over the last 12 months, the UK property market has bounced back with residential transactions in April 2024 reaching 79,590, 17% higher than April 2023, and 9% lower than March 2024. Estate agents can play a vital part in preventing money laundering by conducting thorough due diligence to both deter and identify suspicious activity. Both buyers and sellers can be involved in money laundering as a means of integrating and layering funds.”

Launch of Credas+ Service
To aid estate agents in meeting their AML obligations, Credas Technologies has introduced Credas+, a new managed compliance service. Barnett explained, “The new service offers a single comprehensive solution that delivers a pass or fail result, together with comprehensive compliance reports, including all the remediation evidence. We have made a significant investment in our new Credas+ service, which combines managed outsource compliance for PEPs, Sanctions & IDV. Estate agents will be able to reduce both their workload and the administrative burden of compliance.”

In the past 12 months, Credas Technologies has processed 2.3 million individuals through its platform, representing about 1 in 20 adults in the UK aged 18-65. This demonstrates the extensive reach and effectiveness of their digital compliance solutions.

Analysis of AML Events
Research from SmartSearch has revealed that money laundering is the most prevalent issue among hundreds of AML events recorded across the UK over the past decade. Their 2024 Money Laundering and Financial Crime Stats Report found that 27.5% of the UK’s financial crimes and issues pertain to money laundering, followed closely by AML compliance failures at 23.9%. Other notable issues include drug trafficking (19.8%) and financial fraud (13.4%).

Martin Cheek, Managing Director of SmartSearch, stressed the importance of robust AML processes: “The stats highlight the urgent need for regulated businesses to have adequate AML processes and software in place to detect criminal behaviour. If not, they risk facing multi-million-pound fines, punishments which could include prison time, and enabling criminals to carry out illegal activities, like cleaning dirty cash.”

Need for Proactive Compliance
Cheek added that the high occurrence of AML compliance failures in the UK is concerning: “The notable occurrence of AML compliance failures in the UK, at 23.9%, is pretty shocking. While the figures span a whole decade, which means technological advancements and reforms of laws and regulations will have helped to combat compliance failure in more recent years, this figure is still too high.”