Office of Fair Trading
Printable version E-mail this to a friend

OFT warns estate agents and credit lenders on penalties for AML non-compliance

The OFT has today published its interim policy on imposing financial penalties on estate agents and certain credit lenders who have failed to register under its money laundering registration scheme but continue to carry on a supervised activity.

The Anti-Money Laundering Interim Penalties Policy makes clear that if such estate agents and certain credit lenders fail to register with the OFT, they will be subject to fines that start at £2,000 and increase by £1,000 for each additional unregistered premise. Where the OFT believes estate agents and certain credit lenders are not registered but are carrying on a supervised activity, it will give them 21 days to apply for registration or to explain why they are exempt from registration, before notifying them of the intention to apply a financial penalty.

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.'

NOTES

  1. Download the OFT's Interim Penalties Policy (pdf 128kb). 
  2. The Money Laundering Regulations 2007 came into force on 15 December 2007. The Regulations implement the Third Anti Money Laundering Directive. 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, training staff and reporting suspicious activity to the Serious Organised Crime Agency. 
  3. Prior to 15 December 2007, the businesses supervised by the OFT had to comply with the Money Laundering Regulations 2003 but did not have a supervisory body. Since 15 December 2007 the OFT has been responsible for supervising those businesses who carry on a supervised activity, namely estate agents and Consumer Credit Financial Institutions (CCFIs). CCFIs are consumer lenders who are not authorised by FSA or supervised by HMRC as a money service business. 
  4. The anti money laundering supervisory regime is expected to be self-funding. The Regulations give the OFT the power to charge those it supervises fees to recover its reasonable costs of supervision. 
  5. In July 2009, the OFT launched its registration scheme. Existing businesses should have registered by 31 January 2010. Carrying on an estate agency business or business as a CCFI without being registered is a breach of the Regulations for which the OFT may impose a civil financial penalty. It is also a criminal offence which could result in prosecution. New entrants to the OFT's supervised sectors must register with the OFT before trading in supervised activity. 
  6. The OFT launched a consultation on its future supervisory approach on 9 February 2010, which closed on 10 May 2010. The consultation covered future fee structure, penalties, monitoring and enforcement approach and how best to identify and tackle those who failed to register. The OFT will be publishing a full response to the consultation findings in the coming weeks. 
  7. The interim penalties policy has been adopted for one area of non-compliance with the Money Laundering Regulations 2007 only - the failure to register. Responses to the consultation were taken into account in developing this interim policy. The OFT will in due course produce a full penalties policy covering the range of potential breaches of the Money Laundering Regulations. 
  8. Information on registration (and application forms) is available on the Anti-Money Laundering registration page
  9. For background information on the Money Laundering Regulations 2007, please see www.oft.gov.uk/mlr.
Public enquiries

08457 22 44 99


PDNS: Mandatory Active Cyber Defence for Public Sector Networks. Latest Guide