Financial sanctions reporting obligations will soon apply to all letting agents working throughout the UK as amended guidance and regulations made by the Office of Financial Sanctions Implementation (OFSI) come into force.
Propertymark has warned that all letting agents need to be aware that in contrast to the Money Laundering Regulations, the reporting obligations, which come into play on 14 May, will apply to all letting agency work (regardless of the value of the rent) and not just in relation to lettings where there is a monthly rent of 10,000 euros or more.
There are no additional obligations through the changes to register with HMRC for AML Supervision or carry out Customer Due Diligence as set out in the Money Laundering Regulations.
The financial sanctions are designed to help the UK meet its foreign policy and national security aims, as well as protect the integrity of its financial system. They can include freezing financial assets or restricting access to investment and financial services and for individuals or organisations.
Financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world. Those who are subject to sanctions are referred to as a designated person.
The Office of Sanctions Implementation is responsible for enforcing financial sanctions in the UK and is part of HM Treasury. OFSI produces a comprehensive list of sanctions targets.
Under the regulations, only when letting agents are formally instructed by a prospective landlord or prospective tenant to find land to let for a month or more will they need to conduct financial sanctions checks on the landlord (at the point of instruction) or on the tenant (before signing a tenancy agreement).
Following a financial sanctions check, if the letting agent knows or has reasonable cause to suspect that a person is a designated person or has committed a breach of financial sanctions regulations, they must report to OFSI as soon as practicable to do so.
When reporting to OFSI, letting agents must include information on which the knowledge or suspicion is based as well as any information they hold about the person or designated person by which they can be identified.
There is a form to complete and email address to send the form and associated documents to which is ofsi@hmtreasury.gov.uk.
Nathan Emerson, CEO at Propertymark, said: “Letting agents must recognise that the financial sanctions reporting obligations will apply in relation to letting agency work irrespective of the value of any rental agreement, which is different to registration for supervision and Customer Due Diligence checks under the Anti-Money Laundering Regulations.
“Propertymark has long encouraged letting agents to check who their landlords are as they take them on and from May they must check to see if their names appear on the consolidated list of financial sanctions. Tenant referencing and ID checks already take place and in England, a Right to Rent check is carried out but checks going forward will also need to be done against the consolidated list.
“We have a range of resources and information to support member agents as it’s important that financial sanctions checks are carried out, any third-party supplier that an agent uses is aware, and staff know what to do should they need to report information to the Office of Financial Sanctions Implementation.”
Propertymark has issued a fact sheet to assist members with understanding and complying with the new regulations. It provides a concise outlook of the sanctions reporting obligations and what agents must do.
Propertymark adds that its helpline gives members unlimited assistance and support via trained specialists who support agents with legal queries, general business practice and fresh legislation.
In addition, Propertymark says its Members’ Facebook group provides a platform for discussion and collaboration across processes, training and anything that members need to assist them with everyday problems and share best practices.
