Russian money probe could see a rise in estate agency AML fines

Despite the estate agency sector being identified as one of the top three least compliant sectors with regards to money laundering, there has been a decline in the sums being fined over the past couple of years.

Identity verification service, Credas, has revealed that since 2017, almost £37m has been issued by HMRC across the nine supervised sectors in relation to non-compliance around money laundering.

Money Service Businesses have been by far the worst offenders, not only seeing the highest total issued in fines at £36.2m, the largest median fine during this time at £46,250 but also clocking up the largest individual penalty at an eye-watering £23.8m.

While the estate agency sector has been reprimanded to a far lesser extent, it still holds the unsavoury title as the second least compliant where these fines are concerned.

Since 2017, the sector has seen a total of £563,361 issued in fines, with the median fine issued to estate agency businesses due to non-compliance sitting at £5,775, while the largest single fine was £266,793.

The sector also accounts for the second-largest proportion of total fines issued since 2017 at 21%, with accountancy service providers this time sitting top of the table, responsible for 27% of all fines issued to date.

The good news is that the estate agency sector has seen a steady decline in the median value of non-compliances fines issued of late. So far in 2021/22, this average fine has sat at just £1,000, down from £6,047 per fine the year before and £135,257 the year before that.

Tim Barnett, CEO of Credas Technologies, says: “There was certainly a grace period of sorts offered following the implementation of money laundering compliance regulations back in 2017, but since then, the estate agency sector has seen a number of high profile scalps claimed by HMRC, who have issued some sizable fines for failing to adhere to these regulations.

“The good news is that the message certainly seems to have been received loud and clear and while there have been a few minor fines issued over the last year, the average cost of non-compliance across the estate agency sector has dropped considerably for two consecutive years.

“That said, now is certainly not the time to rest on our laurels. With a clampdown on dirty Russian money in full effect, there’s a very good chance that HMRC will increase its AML activity within the estate agency sector and those who may have facilitated any aspect of illegal activity could be in for a rough ride.”