Money Laundering Supervision for Estate Agents – Fees

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You must pay HM Revenue and Customs (HMRC) fees when you register for anti-money laundering supervision.

These are:

  • an application submission fee
  • a registration fee for each premises
  • an annual renewal fee for each premises
  • If you’re a money service business or a trust or company service provider you’ll also pay responsible person fees.
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Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 
You must pay a non-refundable application charge of £100 when you first apply to register for anti-money laundering supervision.

Premises fee
When you register you must pay £115 for each of the premises you include in your application.

Annual renewal fee
Towards the end of your registration year HMRC will send you an email telling you to log in to your account to renew your registration and pay your renewal fee.

The renewal fee is £115 for each premises shown on the application at the time of renewal.

HMRC may cancel your registration if you don’t pay your annual renewal fee on time.

Fit and proper test fee
If your business is a money service business or a trust or company service provider a fit and proper test will be included in your application to register with HMRC.

There’s a £100 fee for each responsible person the test is applied to.

How to pay the fees
You’ll pay your fees online when you first apply to register and when you renew your registration online. When you input details of your business, the online service will calculate how much you owe and let you pay the total amount due for each type of fee.

If you’ve not yet registered online
If you’re not registered online and need to pay your renewal fees or a fee for an additional nominated person, there’s a variety of ways you can make your payment.

Firms must have established risk and control self-assessment procedures in place.

How HMRC use the fees you pay
HMRC use the fees to:

provide the advice and guidance you need to meet your Money Laundering Regulations responsibilities
carry out checks to make sure businesses are doing all they need to under the regulations
work with other organisations, for example assisting the National Crime Agency with prosecutions

Professional Help Is Available

Compliance Consultant can help provide you with the tools you need to implement, train and embed the new rules, and we can move quickly, getting your firm and your people up to speed in a short space of time, including training and awareness.

Call us on 0203 815 7939 or email at 

mlr2017solution@complianceconsultant.org 

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Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 

MLR 2017 – Estate Agents – How It Will Affect You? Part 2

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In This Second Part Of “Money Laundering – Estate Agents” We Finish Off How You Will Be Impacted

Part 5 – Beneficial ownership information

This section applies to bodies corporate and to trustees. It requires corporate bodies to provide detailed information to a relevant person when taking part in a relevant transaction with a relevant person (regulation 42) and requires trustees to inform the relevant person of their status and to provide information to them, and to law enforcement authorities (regulation 43). The trustee is under additional requirements to hold certain information and provide information to the Commissioners for Her Majesty’s Revenue and Customs (” the Commissioners”) in certain circumstances. The Commissioners are under a requirement to hold the information that has been received from the trustee in a register (regulation 44).

Firms must have established risk and control self-assessment procedures in place.

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Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
Money Laundering Supervision for Estate Agents – Fees

Part 6 – Money laundering and terrorist financing: supervision and registration

This section makes provision in regard to supervisory authorities and registration of relevant persons. It states that supervisory authorities are subject to a duty to cooperate with other supervisory authorities, the Treasury and law enforcement authorities and a duty to collect information and facts. Provision is created for the situations in which a supervisory authority may disclose information it holds for supervisory purposes. Regulations 52 to 59 require the Financial Conduct Authority and the Commissioners to maintain registers of certain relevant persons, and impose corresponding requirements on relevant persons to request registration. The FCA and the Commissioners have powers to suspend or cancel the registration of a relevant person in certain circumstances.

Part 7 – Transfer of funds (information on the payer) regulations

This section lays out the supervisory authorities for a payment service provider and the duties of the supervisory authorities. There are only two supervisory authorities for payment service providers: the FCA and the Commissioners.

Part 8 – Information and investigation

This section gives supervisory authorities information gathering powers (regulations 64 to 67), gives the FCA and the Commissioners further investigatory powers (regulations 68 to 69) and makes provision for the scenario in which these powers may be exercised (regulations 70 to 72).

SUPERVISORY OVERSIGHT
HMRC has increased the size of its supervisory teams for Estate Agents and stated that it will be carrying out an increased number of supervisory visits. It is likely that we will see a significantly greater level of intervention and enforcement after the implementation of MLR 2017. Now is the moment in order to get your ship in order.

Part 9 – Enforcement

This section identifies “relevant requirements” for the purpose of these Regulations and gives the FCA and the Commissioners powers to impose civil penalties on anyone who has contravened a relevant requirement. Regulations 83 to 89 provide for criminal offences where a relevant person has contravened a relevant requirement; prejudiced an investigation or disclosed false or misleading information to the supervisory authorities and make provision in regard to criminal proceedings.

BE WARNED
This section therefore does not impose additional requirements or make changes to the operational nature of what you are doing, but all EABs should take heed of the forewarning that regulators are getting tough on non-compliance and failings.

Part 10 – Appeals

This section provides for an appeal from a decision by the FCA under these Regulations (regulation 90), and for reviews and appeals in connection with decisions of the Commissioners (regulations 91 to 97).

Part 11 – Miscellaneous provisions

Among other things ensures that charges or penalties imposed by the FCA or the Commissioners may be recovered as a debt in civil courtroom proceedings (regulation 98), ensures that the FCA and Commissioners have the capacity to recuperate the costs of their supervision or enforcement action (regulation 99) and establishes obligations on various public authorities to disclose any suspicions they may have or money laundering or terrorist financing (regulation 100).

Firms must have established risk and control self-assessment procedures in place.

CONCLUSION
The new money laundering regulations represent a substantial change to the way all firms must manage the potential of financial crime. What we see in this version of the regulations has produced significant changes and in this accelerated time-frame requires firms to be proactive.

What should you do?
HM Treasury has left little time for firms to acclimatise to the new regulations and with the June deadline fast approaching, firms must act now to ensure they understand and adopt the new rules in time.

Compliance Consultant can help provide you with the tools you need to implement, train and embed the new rules, and we can move quickly, getting your firm and your people up to speed in a short space of time, including training and awareness.

Call Us Today – 0203 815 7939

Sign Up For Our Information Service & Get Sent PDFs About How You Are Affected

Check Out Our Other Posts at

Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
Money Laundering Supervision for Estate Agents – Fees

MLR 2017 – Estate Agents – How It Will Affect You? Part 1

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The most obvious development is that the 2007 MLR was 45 pages long and the new 2017 MLR is 106 pages long. In response to the increasing complexity of financial crime prevention and the prevalence of money laundering the regulations has become more detailed and more prescriptive.

Although always a component part of the MLR, there is a greater emphasis throughout the new regulations that firms must take a risk-based approach and responsibly take decisions according to risk-weighted decisions. It is now expected that firms have a more mature risk appetite statement that links to and drives operational decisions. Senior managers are deemed responsible for these outcomes and it is consequently important that comprehensive records are kept of decisions made and the motivation for them.

The MLR 2017 is structured in 11 Elements. The following sections summarise each of these, highlighting the main impacts that will affect an Estate Agent Businesses EABs.

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Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 
Money Laundering Supervision for Estate Agents – Fees

Part 1 – Introduction

This component sets out the definitions and meanings that apply throughout the regulations and the supervisory authorities for those persons within the scope of the regulations.

SCOPE
The first and probably the most basic change that will impact every EAB, both large and small, is that
the scope of the MLR now extends to purchasers as well as sellers.

In the section explaining ‘Meaning of Business Relationship’, regulation 4 (3) states:
” For the purposes of these Regulations an estate agent is to be treated as entering into a business relationship with a purchaser as well with as a seller”.

This will, at least double the Customer Due Diligence (” CDD”) burden on every EAB, who must now also complete CDD before taking part in a business relationship with a purchaser. Along with the operational resource requirements, this will involve stating in the firm’s policies, when a purchaser turns into a customer and ensuring that the onboarding and periodic review methods are also updated to show this change.

The guidance on lettings is less clear; Recital 8 of the directive states that “estate agents could be understood to include letting agents where applicable”. In the UK, lettings agents are already in, and will continue to be within scope of the Money Laundering Regulations where they conduct estate agency activity and if you also provide letting services, then under the occasional transactions regulation you will need to include them on your CDD radar. The NRA stated that while lettings agents may be an attractive target for criminals seeking to disguise or hide the proceeds of crime, lettings remain an “intelligence gap”. The government will update the NRA before the end of the year, and will seek further evidence on the risks in the estate agency sector, including on the risks related to lettings activity.

GOVERNANCE AND ACCOUNTABILITY
There always needed to be a Nominated Person within an EAB, but the new regulations extend this to requiring a firm to also appoint a director (or equivalent) as having overall responsibility for money laundering. We see this as following the lead of the financial services regulators who introduced a Senior Persons and Certification Regime (SMCR) in 2016, with the intention of strengthening accountability within financial services. This new regime makes individuals within organisations directly responsible for the actions of the firm, with significant criminal penalties if they are found to have been at fault.

The new regulations also describe the rules around ownership and management restrictions of the EAB. This is found in the following section.

Part 2 – Money laundering and Terrorist Financing

This section identifies the “relevant persons” to whom the money laundering provisions in these Regulations apply (regulations 8 to 15). Regulations 16 to 25 impose requirements for risk assessments to be undertaken by the Treasury and the Home Office, the supervisory authorities and relevant persons to identify and assess the risks of money laundering and terrorist financing. They also require relevant persons to have policies, controls and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing identified through the risk assessments. Regulation 26 prohibits anyone from being the beneficial owner, officer or manager of certain firms unless that person has been approved by the firm’s supervisory authority.

RISK MANAGEMENT AND ASSESSMENT
Risk assessment is central to the MLR and impacts almost every aspect of the legislation. The rules have been dramatically extended, now covering six pages instead of the one page found in the 2007 MLR. EABs are required to produce and maintain a detailed and comprehensive risk and control register. Risk management and assessment must broadly cover two perspectives:

1. Enterprise Risk identification and management for the safe pursuit of the firm’s strategy. This must be declared through a Risk Statement including a Risk Appetite statement.
2. Identification and Assessment of risks presented by customer engagement and transacting, in accordance with existing regulations and driving the appropriate level of CDD.

The regulations are so much more detailed when specifying the need for a comprehensive and integrated risk management framework and specify that this must be documented and made available to the supervisory authority. Risk and control frameworks must include self-assessment mechanisms that are embedded within the day-to-day operation of the firm.

POLICIES, CONTROLS AND PROCEDURES
As an extension to the risk management framework and a step up from the existing regulations, the rules specify that firms must establish and maintain written policies, controls and procedures. Firms must ensure that they implement processes to ensure that these are reviewed regularly to ensure that are embedded and up-to-date. The regulator will require sight of these documents along with the method for maintaining them and ensuring they remain reliable.

Firms must have established risk and control self-assessment procedures in place.

Part 3 – Customer due diligence

This section makes provision for customer due diligence strategies. Regulations 27 to 32 identify what CDD measures must be undertaken by relevant persons, as well as when those measures must conducted. Regulations 33 to 35 identify when enhanced customer due diligence measures must be applied by the relevant person along with the general customer due diligence measures required by regulations 27 to 32. Regulations 36 to 37 identify when simplified customer due diligence measures may be applied by the relevant person.

PROVISION OF INFORMATION
Here we see a fundamental change that will have a significant impact to the way all CDD is conducted by EABs. Under MLR 2017 an obligation has been placed on a party to provide information within 2 days of it being requested. This concerns parties being ‘relied’ upon, corporate bodies and trusts. This obligation is referenced several times throughout the MLR, but for example regulation 42( 1) states:
” When a UK body corporate enters into a relevant transaction with a relevant person, or forms a business relationship with a relevant person, the body corporate must on request from the relevant person (and at the latest within two working days) provide the relevant person with-.
(1a) information identifying-.
( i) its name, registered number, registered office and principal place of business;.
( ii) its board of directors, or members of its management body;.
( iii) its senior management;.
( iv) the law to which it is subject;.
( v) its legal owners, and.
( vi) its beneficial owners, and.
(1b) its memorandum of association or other governing documents.
(2) If, during the course of a business relationship, there is any change in the identity of the individuals or information falling within paragraph (1), the UK body corporate must notify the relevant person of the change and the date on which it occurred within two working days.”.
It is difficult to see how this will operate and how enforceable it will be. However, if effective, this could greatly reduce the burden on CDD teams.

THREE-TIERED APPROACH.
A three-tiered approach to CDD still exists, with customer due diligence being the default level. The concept of both simplified and enhanced due diligence remains, but the regulation is now more prescriptive about how these may be applied. It is essential that all firms have a clear and robust risk assessment methodology that can be applied routinely to each new client before deciding what level of due diligence is appropriate.

BENEFICIAL OWNERSHIP.
Beneficial ownership, bodies, corporates or partnerships still only extends to control or ownership of 25% or more.

Regulation 26 (1) states, “No person may be the beneficial owner, officer or manager of a firm within paragraph (2) (” a relevant firm”) [a list including estate agents] unless that person has been approved as a beneficial owner, officer or manager of the firm by the supervisory authority of the firm.”.

Estate agents must ensure that before 26 June 2018 that they have applied to the supervisory authority for approval. You will not be in breach concerning this regulation if applications that have been made before 26 June 2017 have not been determined.
Taken literally, this means that all firms must submit applications to HMRC for approval of their members and senior managers. Logistically this represents a significant amount of extra work the firm, but nothing compared with the administration that HMRC will have to complete.

PEPS.
The definition of a PEP now includes domestic PEPs but the time limit from when a person ceases to be considered a PEP has not been changed and is still 12 months from leaving a politically exposed position; longer at the discretion of the firm conducting CDD. All EABs will must have significant controls and on-going tracking of any PEP relationship they establish.

Firms must have established risk and control self-assessment procedures in place.

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Check Out Our Other Posts at

Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 
Money Laundering Supervision for Estate Agents – Fees

Part 4 – Reliance and record keeping.

This section lays out the circumstances where a relevant person may rely upon another person to apply customer due diligence measures (regulation 38). It also explains as to which records relevant persons are required to keep, and when they are to be deleted (regulation 39), and clarifies the requirements concerning data protection (regulation 40).

RELIANCE.
Reliance has been extended, making things easier to use a 3rd party for part or all CDD. The regulations are more prescriptive and significantly include other estate agents. However, it should be noted that the risks of relying on a 3rd party are generally greater than the benefits. Barriers to reliance are that 3rd parties might be slow in supplying copies of identification documentation to help identify the customer or its beneficial owner. To mitigate this, the regulations specify that a 3rd party must abide by the two-day rule for providing information and updating on changes.

Proceed with caution; it may now be easier to depend on others, but be aware that the risk of this being information being inadequate or wrong still lies with you.

The regulations describe the form of written arrangement that must be put in place when exercising reliance, together with additional record keeping requirements. Firms must ensure that when placing reliance on any 3rd party, that they comply carefully to the rules and that detailed files are kept as these may be called on for as many as five years after the completion of the transaction or business relationship. If you are the relevant person being ‘relied’ upon, you must also keep your own records for the same period.

RECORD KEEPING.
Detailed records must be kept for a minimum of five years from the date the transaction or customer relationship ended. Under the MLR 2017 an estate agent must delete records held after the required period of five years has elapsed. The only exception to this is when there may be other legal reasons for retaining the information, for instance, an ongoing investigation.
Separate to the MLR is the General Data Protection Regulation (GDPR) targeted at securing customer and personal data and ensuring that an individual has access to their data, kept by organisations. This is a separate legislation, but applies completely to EABs. It is intertwined with the MLR and comes into force in May 2018. Firms would do well to adopt its recommendations in front of the implementation date.

TRAINING.
Training is an obligatory requirement and there is an increased importance on the importance of training. The regulator sees culture being at the heart of combating financial crime and believes that it should belong to everybody’s everyday job. This begins with recognition which emerges from training. Senior managers will be incriminated for a lack of training which could bring about punitive damages. Firms must ensure that they have assessed and enhanced training to meet the new requirements in the MLR. This must be well documented and evidenced; without which there is no other way to prove it happens.

 

What should you do?
HM Treasury has left little time for firms to acclimatise to the new regulations and with the June deadline fast approaching, firms must act now to ensure they understand and adopt the new rules in time.

Compliance Consultant can help provide you with the tools you need to implement, train and embed the new rules, and we can move quickly, getting your firm and your people up to speed in a short space of time, including training and awareness.

Call us Today on 0203 815 7939

Sign Up For Our Information Service & Get Sent PDFs About How You Are Affected

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Who Must Register – Money Laundering Supervision for Estate Agents 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 
Money Laundering Supervision for Estate Agents – Fees

 

Who Must Register – Money Laundering Supervision for Estate Agents

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The New Money Laundering Regulations 2017 are due to be effected from 26th June 2017… Are You Registered?

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Who must register
You must register with HMRC if your business carries out any activity defined as estate agency work.

This includes things like:

  • sending out property details and arranging viewings
  • offering personal advice to potential sellers or buyers
  • answering questions from potential sellers or buyers
  • passing on details to customers

Businesses that must register include:

  • high street residential estate agencies
  • commercial estate agencies
  • property or land auctioneers
  • land agents
    relocation agents, property finders, private acquisitions specialists
  • business brokers or transfer agents brokering the sales or transfer of client businesses to third parties
  • a solicitor’s property centre in Scotland
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MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
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Money Laundering Supervision for Estate Agents – Fees

You don’t need to register if you’re:

  • a lettings agent only carrying out lettings work
  • an auctioneer already registered with HMRC as a high value dealer
  • publishing adverts or distributing information, for example in a newspaper
  • an intermediary, like an internet property portal for private sales, allowing private sellers to advertise their properties and letting sellers and buyers to contact each other (but only if you do nothing else covered by the general definition of estate agency work)
  • a solicitor carrying on estate agency work as part of that practice as a solicitor, and not as a separate business
    An estate agency business may be regulated by the Financial Conduct Authority (FCA) for another purpose, for example because they provide consumer finance or hire purchase services. In this situation HMRC and the FCA will consider the possibility of a single supervisor overseeing the anti-money laundering arrangements. Supervision for individual businesses will be looked at on a case by case basis.
  • If you’re an appointed representative of a business that’s authorised by the FCA, then the FCA won’t be your supervisor and you must register with HMRC.

Additional guidance
HMRC has published guidance for estate agency businesses on how to comply with their obligations under the money laundering regulations and related legislation.

The guidance explains what businesses must do to protect themselves from the risks of money laundering and terrorist financing and how to report suspicious activity.

What happens if you don’t register
You may receive a penalty if you don’t register a relevant business. This includes carrying on business as an estate agent:

  • without being registered
  • after your registration has been cancelled

The amount of the penalty will depend on each individual case. They will take into consideration:

  • whether you told HMRC that you’re not registered or HMRC has discovered it
  • your reasons for not registering
  • whether you have had any previous warning or penalties
  • They may also take other factors into consideration.

When and how to register
You must register with HMRC before carrying on any activity as an estate agency business and pay the necessary fees.

Apply to register with HMRC.

Annual renewal
At the end of each registration period we’ll send you a renewal notice inviting you to renew your registration by paying the annual fee on all your listed premises. If you don’t need your registration to continue then you should notify HMRC.

If you don’t pay the correct renewal fee then HMRC may terminate your registration and remove your business from its anti-money laundering register.

Don’t Forget: Firms must have established risk and control self-assessment procedures in place.

Compliance Consultant can help provide you with the tools you need to implement, train and embed the new rules, and we can move quickly, getting your firm and your people up to speed in a short space of time, including training and awareness.

Call us today on 0203 815 7939

Sign Up For Our Information Service & Get Sent PDFs About How You Are Affected

Check Out Our Other Posts at

MLR 2017 – Estate Agents – How It Will Affect You? Part 1 
MLR 2017 – Estate Agents – How It Will Affect You? Part 2 
Money Laundering Supervision for Estate Agents – Fees

 

“Sell in May, and come back on St. Ledger’s Day” – Good advice or sheer bunkum?

You’ve almost certainly have heard the phrase, but what’s the thinking behind it? We shed some light on this old City adage and take a look at whether, historically at least, the figures add up.

Source: Ned Davis Research, Ibbotson Associates

This interview, recorded on 22/5/17, is designed to give an insight into our investment managers views about investing at the current time. It does not represent advice. Individuals seeking advice should talk to one of our advisers to obtain advice relevant to their circumstances and needs. Past performance is no guarantee of future returns. The value of investments may fall as well as rise.

McCarthy Taylor Limited is authorised and regulated by the Financial Conduct Authority.

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Long term care planning & tax, an election manifesto special

We look at the Conservative’s manifesto proposal regarding social care funding, and what we can all realistically expect in the coming years. There’s been plenty of talk about “long term care planning” in recent times, however are there actually any specific & viable solutions available in the market place? Or would we perhaps all do better to focus on long term tax efficient investments? There’s also an odd quirk in the rules to be considered, and the appropriate use of trusts for larger estates.

This interview, recorded on 22/5/17, is designed to give an insight into our investment managers views about investing at the current time. It does not represent advice. Individuals seeking advice should talk to one of our advisers to obtain advice relevant to their circumstances and needs. Past performance is no guarantee of future returns. The value of investments may fall as well as rise.

McCarthy Taylor Limited is authorised and regulated by the Financial Conduct Authority.

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IFAs! Have your work double-marked for suitability

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‘Can help iron out rough edges’

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Advisers should have their work checked over to make sure standards remain consistent and high, according to Threesixty Services managing director Phil Young.

 Small, independent and directly authorised firms performed slightly less consistently than their larger and restricted counterparts in the regulator’s recent suitability review, but Young argued even a peer-group review can help iron out the rough edges for smaller, independent firms.

“The bit I’m increasingly seeing over the years that has an impact on adviser behaviour is whether there’s an independent ‘second line’ of compliance review brought in,” he said.

Compliance Consultant have also noticed that there are poor standards and these often remain unchecked or reported. Until they get a visit!

We can Help – We can conduct a suitability review check for you at a reasonable cost. Don’t rely on your compliance outsourced service that just charge you a fee and spend a few hours with you each year.

Source- https://www.professionaladviser.com/professional-adviser/news/3010804/have-your-work-double-marked-phil-young