The Office of Fair Trading (OFT) fined three real-estate agents a total of £246,665 ($408,000) for “significant and widespread” anti-money laundering lapses last week.
Hastings International UK Limited based in South London was assessed a £47,966 ($80,000) fine, Jackson Grundy based in Northampton was fined £169,652 ($281,000), and Jeffrey Ross of Cardiff was fined £29,000 ($48,000).
The regulations are designed to prevent businesses from being used for money laundering or terrorist financing purposes.
The rules require regulated businesses to apply risk-sensitive policies and procedures on the verification of customer identity, record-keeping, training staff and reporting suspicious activity to the National Crime Agency, among other obligations.
The OFT cited these compliance-oversight lapses in its assessment of penalties against Hastings International, Grundy, and Ross:
- Failures to apply adequate customer due diligence measures when carrying out estate agency work.
- Failures to conduct ongoing monitoring of business relationships.
- Failures to establish and maintain appropriate policies and procedures on adequate record-keeping, internal controls or risk assessments.
- Failures to train relevant employees in how to recognise and deal with transactions and other activities which may be related to money laundering and terrorist financing.
Kate Pitt, OFT Deputy Director of Anti-Money Laundering, said: “The Money Laundering Regulations are designed to detect, deter and disrupt financial crime. We fined these three estate agents as they were failing to comply fully with the regulations, and so were more vulnerable to money laundering or terrorist financing activity.”
The fines are the last action in this area by the OFT. On March 31, the OFT’s anti-money laundering powers and responsibilities passed to HM Revenue & Customs.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.