Estate agents ‘are at an increased risk of money laundering’ – London Wallet

Estate agents submitted 15% more Suspicious Activity Reports (SARs) in 2021/22 compared to the previous year, new analysis from Thirdfort, the risk management platform, reveals

The study shows the total number of SARs submitted by estate agents increased from 948 in 2020/2021 to 1094 in 2021/2022, representing 0.1% of the total numbers of SARs from across all sectors.

Banks submitted the most SARs across 2020/2021 and 2021/2022, registering nearly 600,000 and 700,000 respectively. Overall, some 50 sectors submitted 1.8 million SARs across the two periods.

*Defence Against Money Laundering SARs

HM Treasury and the Home Office assessed estate agents at ‘medium’ risk for money laundering.

In their report, the departments said this increased risk, up from ‘low’ in 2017, is ‘a result of a greater understanding of the risks in the sector’. It was also because of ‘the increase law enforcement has observed in money laundering cases involving overseas buyers and use of complex structures’.

Harriet Holmes, AML Services Manager at Thirdfort, said: “Estate agents are at an increased risk of money laundering, but just a fraction are submitting SARs. As such, there may be some underreporting in the sector. There may be several reasons, from a lack of adequate information, the client relationship, to agents not appreciating the SARs process . But, whatever the reason, agents must recognise regulators are more focused on SARs than they used to be.

“Agents should take a thorough approach to their anti-money laundering obligations and encourage employees to engage with the compliance process and raise issues when they spot them. Taking a more proactive approach to AML will enable agents to stay on the right side of the regulations far beyond SARs submission alone.”