Firms subject to increasing regulations for overseas property transactions

Firms subject to increasing regulations for overseas property transactions


UK-based estate agents and Consumer Credit Financial Institutions (CCFIs) assisting with buying or selling overseas property are now subject to Anti-Money Laundering (AML) regulations following changes to the guidelines.

The aim of the Money Laundering Regulations is to reduce the risk of supervised businesses being used for money laundering or terrorist financing, which means that businesses have to apply measures such as verifying customer identity, training staff and reporting suspicious activity to the Serious Organised Crime Agency (SOCA).

According to an OFT press release, estate agents or CCFIs (consumer lenders who are not authorised by the Financial Services Authority or supervised by HM Revenue & Customs as a money service business) must register as soon as possible and those that fail to do so may be subject to a fine or face prosecution.

A tribunal has upheld a fine on an estate agent for trading while unregistered in which the decision was made by the First-Tier Tribunal to dismiss Sussex-based estate agent, Mansell McTaggart Limited's appeal against a £3,000 fine imposed by the OFT.

The Tribunal found that the penalty imposed in this case was appropriate and now Mansell McTaggart Limited is now registered with the OFT under the AML Regulations.

To date, around 7,000 estate agents and 6,000 consumer credit lenders have registered with the OFT under AML regulations.

Commenting on the changes, David Fisher OFT Director of Anti Money Laundering, said: “The changes to the regulations will help to deter, detect and disrupt financial crime by reducing businesses' vulnerability to being used for money laundering or the financing of terrorism.

“It is important that businesses comply with the regulations and register with the OFT. As shown by our action against Mansell McTaggart Limited, where they do not, we will impose penalties.”

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