A Guide to Anti-Money Laundering (AML) Compliance for Real Estate Buyers & Vendors
In the world of real estate, the transparency and integrity of transactions are paramount. To safeguard these principles and adhere to legal obligations by HMRC, Anti-Money Laundering (AML) regulations are not just a necessity; they represent a shared responsibility among all parties involved, including you, the customer.
In this article, we will delve into the importance of AML regulations and what is required from landlords, vendors, occupiers, and purchasers to ensure compliance with the required regulation.
Why AML Matters to You?
AML regulations are not just recommendations; they are legal requirements imposed by government authorities. Clients who engage in real estate transactions are obligated to adhere to these regulations. Non-compliance can lead to serious legal consequences, including fines, imprisonment, or the forfeiture of assets.
AML regulations are designed to prevent and detect money laundering, which often involves illegally acquired funds. By participating in AML compliance, clients help ensure that their transactions are free from financial crime. This safeguards your own financial interests and prevents involvement in illegal activities unknowingly.
Our role is ensuring all that the money received from a transaction do not pose any significant risks to our clients from financial security, reputation, integrity, and responsibility to society.
Your Role in AML Compliance
Regardless of whether you’re a buyer, seller, landlord, or occupier, you have a pivotal role to play in AML compliance. Here are the key roles clients play in AML compliance:
Identification and Verification:
- You can expect to provide proof of identity, typically through official documents like a passport or driver’s license. These copies must be certified by a solicitor, chartered accountant, bank official, or public notary.
- Be prepared to present proof of your address, often through documents such as utility bills, bank statements, or council tax statements.
- Ensure that these documents are recent, generally dated within the past three months.
For UK Incorporate Clients:
- Companies, partnerships, or other corporate entities must provide proof of registration, including the Certificate of Incorporation, Memorandum and Articles of Association, Latest Confirmation Statement or Annual Return, and details of individuals authorized to act on behalf of the entity.
- Beneficial ownership information and shareholding structures will also be required. All individuals holding more than 25% of the entity’s shares will undergo individual AML checks.
For Overseas Entities:
- Overseas entities must provide the same documentation as domestic entities. Additionally, a certificate of incumbency and a certified company structure chart will be necessary.
- Depending on the entity’s operations in high-risk jurisdictions, further documentation may be required to verify the source of funds.
- For trusts, estate agents will request trust deeds, along with confirmation of the identities of trustees, settlors, and beneficiaries. Individual documentary evidence will be requested to verify their identities
Clients should be aware that their transactions may be monitored to ensure consistency with their known financial resources. This monitoring helps detect any unusual or suspicious activities.
Understand that if any unusual or suspicious activities are detected, estate agents are legally obligated to report them to the relevant authorities.
Depending on individual circumstances and the complexity of the transaction, clients may be asked to provide further documentation to ensure AML compliance. Clients should cooperate with these requests to facilitate the transaction.
Compliance with AML regulations is a shared responsibility, and clients play a pivotal part in upholding these standards. Your cooperation is integral to upholding the overall health and trustworthiness of the market. Should you have any questions or require clarification regarding AML-related matters, our experienced agency and compliance team is here to guide you through the process, ensuring a smooth and secure transaction.
Please note that, in accordance with Anti-Money Laundering Regulations, evidence of identity and the source of funding will be required from both the seller/landlord and the successful purchaser/occupier before instructing solicitors. Your cooperation is greatly valued and contributes to the security and transparency of real estate transactions.