If you are working in the regulated sector and are required to carry out Anti Money Laundering (AML) checks then the simple answer to the second question is yes. You need to be very aware.
Since earlier this year estate agents and in certain circumstances letting agents became regulated in relation to money laundering regime. It is a legal requirement that they check for proof of funds from a client at the offer stage. Most agents are aware of the new law and have tightened their procedures to ensure that they are compliant. If you do have any uncertainties about the law and how the new regime works you may want to have a look at our blog on AML for Estate Agents.
Suspicions of fraudulent activity need to be reported to the National Crime Agency (NCA) in a Suspicious Activity Report. The NCA may in turn make further investigations into the transaction or the buyer.
Warning somebody that they are part of a money laundering will mean that they change their behaviour to avoid being caught in the act of offending. This includes telling somebody that a Suspicious Activity Report has been made about them. The Suspicious Activity Report would typically be handed to HMRC, the police, NCA or another nominated officer. Estate Agents should be aware that if a Suspicious Activity Report is made, the buyer must not be informed. It is a criminal offence under section 333A of the Proceeds of Crime Act 2002 to tell a person that a report has been made if you know or suspect that you’re likely to prejudice an investigation by disclosing this information. This criminal offence is known as Tipping Off.
The same offence would be committed if, for example, the police were to request your records of a buyer or a transaction and you informed the parties that an investigation was taking place.
The penalties for Tipping Off are five years’ imprisonment and/or an unlimited fine. We are sure you agree – best avoided.
So the moral of the story is to be vigilant. Make sure that your AML procedures are in place and rigorously enforced and if you do have to report any suspicious activity make sure that you keep it to yourself.
For further information on Anti Money Laundering procedures, or conveyancing in general, why not contact one of Alexander JLO’s expert property team to see what we can do for you.