Money Laundering Policy Statement
Money laundering is the manipulation of illegally obtained funds by criminals and terrorists to give the appearance of them coming from a legitimate source and therefore disguising their origin.
As of the 26thJune 2017, the Money Laundering Regulations 2007 are to be replaced by The 4th Money Laundering Directive (The Money Laundering, Terrorist Financing & Transfer of Funds (Information on the Payer) Regulations 2017). This extends our responsibilities to also include checks on buyers in addition to sellers. On receipt of an acceptable offer we shall obtain an identity check of the buyer/s and obtain the source of the cash element of the purchase price. Without this information we shall be unable to progress the sale.
All offices of HOTBLACK DESIATO are registered with HMRC for anti-money laundering supervision under the Money Laundering Regulations
A risk sensitive or risk-based approach is where businesses assess the risk of customers laundering money through their business. Whilst HOTBLACK DESIATO takes the starting point that most customers will not launder money we do identify criteria that may indicate a higher risk of money laundering – e.g. where there is no face-to-face meeting to establish identity.
It is the policy of Hotblack Desiato that all our customers provide identification. These are in electronic form via a specialist online Anti Money Laundering check
It is incumbent on estate agents to look out for suspicious activity and to have in place procedures to identify customers and to verify their legitimacy in order to prevent money laundering and terrorist financing. These checks, known as Customer Due Diligence (CDD) are also carried out on Beneficial Owners.
Beneficial Owners are defined as:
In the case of a company, (other than one which is listed on a regulated market, eg. The London Stock Market), the beneficial owner/s are those who owns or controls more than 25% of shares or voting rights.
In the case of a partnership (other than a limited liability partnership), it is an individual who is entitled to 25% or more of the profits or the capital of the partnership or who has more than 25% of the voting rights of the partnership.
In the case In the case of a trust ‘beneficial owner’ applies to: Any individual who is entitled to at least 25% of the capital of the trust property or has control over the trust.
In the case of an estate of a deceased person, ‘beneficial owner’ means the executor/s, or administrator.
Hotblack Desiato has a Money Laundering Reporting Officer (Director, Stuart Shiers) whose responsibility is to receive internal reports and who will forward reports to National Crime Agency (NCA) as necessary. The Deputy MLRO is the Managing Director, Mr David Pinnick. Both are based at the Islington Office.
HOTBLACK DESIATO is committed to staff training in anti-money laundering legislation and this is also covered as a part of the induction of all new staff.
It is a priority of Hotblack Desiato that staff read and understands the Policy Procedure in place and that staff training is provided with training in Government Anti Money Laundering Policy.
Staff are aware that they must raise an internal report on suspicious activity where they know or suspect money laundering or terrorism activity. It is an offence to fail to report suspicious activity.
The nominated officer (MLRO) will consider all reports and decide action, notifying the National Crime Agency (NCA) by making a Suspicious Activity Report (SAR) if considered appropriate.
Consent from NCA would need to be obtained before proceeding with a suspicious transaction. It is a criminal offence to do/say anything that “tips off” a disclosure.
In the case of Landlords, proof of ownership of the property being let is also required (eg a mortgage statement, a copy of the title deeds or copy of the lease).
In the case of tenants from abroad, if they require a visa to enter the country, we require a copy of that visa.
For overseas vendors and landlords the same checks as for domestically based customers are applied. Additionally a Land Registry check can be made to determine proof of ownership. The risk is assessed and, if not satisfied, further checks into the identity of the individual may need to be obtained. (Enhanced Due Diligence, or ,EDD)
Where practically possible It is HOTBLACK DESIATO policy that all vendors and purchasers must be identified fully with a minimum of two forms of ID, evidence of identity being photographic and also evidence of residence e.g. a utility bill dated in the last three months. Otherwise an electronic, online money laundering check is carried out, which is recognised by HMRC and the Joint Money Laundering Steering Group (amongst others).
If the verification of the customer’s identity is done by documents this should be based on:
A government issued document with the customer’s full name and photo with either the customer’s date of birth or residential address such as:
- a valid passport
- a valid photo card driving licence
- a national identity card
- a firearms certificate
- an identity card issued by the Electoral Office for Northern Ireland
Where the customer doesn’t have one of the above documents, or the customer doesn’t meet the criteria in our risk assessment, we will require the following:
- a government issued document (without a photo) which includes the customer’s full name and also secondary evidence of the customer’s address, for example an old style driving licence or recent evidence of entitlement to state or local authority funded benefit such as housing benefit, council tax benefit, pension, tax credit .
- secondary evidence of the customer’s address (not downloaded from the internet) for example a utility bill, bank, building society or credit union statement or a most recent mortgage statement
For customers other than private individuals
For customers who are not private individuals, such as corporate customers and private companies, the business must obtain information that is relevant e.g. company registration number, registered address and evidence that the individuals have the authority to act for the company – a search at Companies House will reveal details of directors and company secretary.
The above requirements for documentation will be applied to all shareholders holding 25% or more of a business.
Suspicious Activity Reporting
A report should be made if a member of staff/ the nominated officer thinks that there is a possibility, which is more than fanciful, that a person is or has been engaged in money laundering or terrorist financing.
The report should be made to the HOTBLACK DESIATO Money Laundering Reporting Officer who, should they be satisfied that there are grounds to suspect money laundering or terrorism, will make a Suspicious Activity Report (SAR) to the National Crime Agency (NCA)
What is Suspicious Activity?
This list is by no means exhaustive but includes:
Reluctance to provide details of their identity
Customer is trying to use intermediaries to hide their identity or involvement
There appears to be no genuine reason for the customer using the business’s services
Money is paid by a third party who does not appear to be connected with the customer
The customer requests payment to a third party who has no apparent connection with the customer
A cash transaction is unusually large and the customer will not disclose the source of funds.
A transaction is carried out for less than market value with an unconnected person
Should a report be made then it is important that this fact, and any information about the transaction in question, is kept confidential
The following records are required to be kept for 5 years:
Copies of, or references to, the evidence obtained of a customer’s identity for five years after the end of the customer relationship, or five years from the date when the transaction was completed.
Supporting records relating to a customer relationship or occasional transaction for five years from the date when the transaction was completed.
The purpose for keeping these records is to demonstrate the business’s compliance with the regulations and to aid any resulting investigations.