Making the case on anti-money laundering at Westminster

Propertymark applying pressure

In the meeting, Timothy set out the case for regulation of the sector against the backdrop of issues with economic crime, piecemeal legislation, and broken housing markets across the UK, along with recent developments such as the introduction of mandatory Client Money Protection.

The meeting highlighted issues that Propertymark members have in complying with the law when banks refuse to provide appropriately structured client accounts, the challenges around suspicious activity reports, and the lack of access to information about politically exposed persons.

Economic Crime Act 2022

Propertymark has a clear timeline of campaign activity in this area and has long argued for a practical approach to anti-money laundering measures for the sector. The Economic Crime Act 2022 came into force quickly earlier this year following the invasion of Ukraine by Russian forces and concerns about property owned by Russian oligarchs. Propertymark attends meetings with the Home Office’s Economic Crime Legislation Private Sector Working Group.

Register of Overseas Entities 

Following lobbying from Propertymark, a register of overseas entities was rolled out in August 2022. In 2018, Propertymark gave oral evidence to the UK Parliament Treasury Committee Inquiry into Economic Crime and this year ran a virtual roundtable with members and Companies House inputting to help shape the usability and development of the register. A second Economic Crime Bill from the UK Government is due to come into force in this parliamentary session alongside an Economic Crime Plan.

Hodge, who has a formidable reputation for action and a comprehensive grasp of the Economic Crime brief, sought information about issues for agents and their clients with HMRC activity, and the effectiveness of HMRC as a supervisor given the lack of specialist knowledge of the sector.

The APPG’s recommendations have some parity with Propertymark’s stated objectives which focus on comprehensive due diligence on all parties to a transaction and a public register of beneficial owners with the requirement for annual updates.

Recommendations of the Anti-Corruption and Responsible Tax APPG

Reform Companies House with new powers for the registrar to verify the information to ensure accuracy, challenge the data where red flags are raised, and remove corporate entities from the register when rules are broken.

Increase the price of company incorporation from £12 to £50 to ensure that Companies House has a sustainable self-funding model for the future while keeping the cost globally competitive.

The Foreign Office must ensure that public registers of beneficial ownership in the Overseas Territories and Crown Dependencies are faithfully implemented by early 2023 with full and free access to company data, not limited to single entries.

The existing UK trust register housed in HMRC should be made more transparent. A more accessible register will enhance our ability to fight corruption, money laundering and illicit financial flows through better access to information by investigators, the press and civil society.

Estate agency businesses should be required to declare any property transactions with politically exposed persons to the National Crime Agency. This would target the use of the UK property market to launder funds. Propertymark highlights that HM Treasury should first introduce an easily accessible politically exposed person list to help property agents comply with due diligence requirements.

Propertymark supporting agents

As well as lobbying legislators across the UK, Propertymark provides a range of resources to support members with compliance in this area including FAQs on economic crime and guidance for estate and letting agent businesses supervised for anti-money laundering.

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