WIREDGOV

The OFT today issued a reminder to businesses it supervises under money laundering regulations to improve compliance or risk enforcement action.

The reminder comes as the OFT announces the findings of two separate pilot programmes, designed to identify and address compliance and registration issues across the UK.

The first targeted estate agents in England, Wales and Scotland, and focused on registration. The second concentrated on the compliance of estate agents in Northern Ireland. 

The review in England, Wales and Scotland uncovered 213 unregistered estate agents. After the OFT made contact, 212 registered and a penalty of £2,000 was imposed on one trader for failure to register - the trader has now registered.

The Northern Ireland compliance pilot was undertaken jointly with Trading Standards staff. It revealed low levels of estate agent compliance, including problems with verifying customer identity and implementing policies and procedures designed to reduce the risk of the businesses being used for money laundering purposes.

All but one of the 22 estate agents visited required extensive advice on how to comply. The OFT provided businesses with individual advice and will also contact trade associations to further improve members' compliance. 

The OFT's anti-money laundering team has now answered over 6,500 business enquiries on how to comply and continues to provide guidance. 

Mario Tsavellas, OFT Director of Anti-Money Laundering, said:

'Raising awareness and improving compliance with money laundering regulations plays an important part in the Government's aim of deterring and disrupting financial crime and the funding of terrorism.

'The OFT is committed to supporting businesses through education, advice and guidance. However, where necessary, we will use our powers to impose penalties or prosecute non-compliant businesses.'

NOTES

1. The Money Laundering Regulations 2007 came into force on 15 December 2007. Since 15 December 2007 the OFT has been responsible for supervising those businesses who carry on a supervised activity, namely: 
   
   - estate agents, which includes residential and commercial estate agencies, relocation agents and property finding services, and 
   - Consumer Credit Financial Institutions (CCFIs), which are organisations involved in consumer credit lending activity not authorised by the Financial Services Authority (FSA) or supervised by Her Majesty's Revenue and Customs (HMRC) as a money service business.
   
2. The aim of the Regulations is to reduce the risk of supervised businesses being used for money laundering or terrorist financing. Businesses have to apply measures such as verifying customer identity, record keeping, training staff and reporting suspicious activity to the Serious Organised Crime Agency. For further information on the Money Laundering Regulations 2007 please see www.oft.gov.uk/mlr.
3. The OFT Anti-Money Laundering (AML) team was set up to secure compliance with the Regulations and assist estate agents and consumer credit lenders in protecting themselves from being used for money laundering and terrorist financing.
4. More information on the OFT's approach to enforcement is available in:
   
   - The OFT enforcement principles (OFT1094) (pdf 162kb)
   - The Money Laundering Regulations 2007 - The OFT's approach to penalties (pdf 130kb)
   - The Money Laundering Regulations 2007 - The OFT interim penalty policy for trading while unregistered (OFT1271) (pdf 126kb).
5. The trader who was subject to a penalty for unregistered trading has a right to appeal the OFT's decision for a limited time. Any decision made by the OFT to apply a penalty, revoke or refuse a registration can be appealed to the First-Tier Tribunal (Consumer Credit). 
6. Download OFT Supervision under the Money Laundering Regulations 2007 - Report to HM Treasury 2010-2011 (pdf 246kb).