News Category: Industry News

Published: 20-Sep-2010

http://www.rman.co.uk/article_oft-set-to-fine-agents-on-money-laundering-3543.html

The OFT is to clamp down with fines on estate agents who have failed to sign up to its money laundering register.

It has been illegal since January 31 this year to trade as an estate agent if the business has not registered.

However, while the OFT was cracking the whip with one hand, with the other it had not even begun to put penalties in place. At the time it warned of penalties being up to two years in prison and unlimited fines. In fact, the punishments now finally in place look decidedly watered down.

After the January 31 deadline – widely ignored by most agents –  a consultation about the penalties was launched in February and closed in May, with the OFT response to the consultation findings yet to be published. However, the OFT says its new “interim” policy has been designed in response to the consultation.

It has thus taken a full seven months to spell out what the OFT will do in the short to medium term about agents who have failed to register, at a cost of £115 per office.

As an interim policy, estate agents who have not registered will be given 21 days to apply, or to explain why they are exempt, before being fined.

Under the new Anti-Money Laundering Interim Penalties Policy, fines will start at £2,000 and increase by £1,000 for each additional unregistered premise.

The OFT says that a full penalties policy will be produced “in due course”.

Mario Tsavellas, OFT Director of Anti-Money Laundering, said: “Estate agents and certain credit lenders have an obligation to comply with statutory obligations under the Money Laundering Regulations 2007, which includes registration with the OFT. Where businesses choose to ignore OFT warnings and do not register, we will impose civil financial penalties.

“It is vital that the OFT continues to identify those who should register, so that the OFT can supervise them effectively and reduce the risk of money laundering and terrorist financing in these sectors.”

The number of agents who have not signed up to the OFT’s anti-money laundering register is unknown, but by March, only 5,684 applications for the register had been received.

Estate agents are widely angry about the need to register, having consistently pointed out that they do not handle money – unlike letting agents, who do not have to register with the OFT.

Information on registration, plus application forms, is available on the anti-money laundering page of the OFT’s website.