Solicitors have criticised the UK’s anti-money laundering (AML) rules as a ‘tick box’ exercise that does not take a risk-based or proportionate approach to regulation.
The comments have come from trade body The Law Society after HM Treasury’s consultation on the effectiveness of current anti-money laundering rules which ran from July 22nd to October 14th this year.
These criticisms are often heard within the property industry; many agents in more far-flung areas of the UK away from prime central areas feel the AML regulations they must follow by law are overly heavy-handed given the low risk of money laundering involved.
HMT’s consultation has sought to ensure that the UK’s anti-money laundering and counter terrorist financing regime effectively deters money laundering and terrorist financing activity ‘whilst being proportionate and managing burdens on businesses’.
“While we welcome HM Treasury’s commitment to making the AML regime proportionate and effective, the current regime does not promote a risk-based approach and instead drives ‘tick box’ compliance, to satisfy overly prescriptive requirements, which is a particular challenge for small firms,” says Law Society president I. Stephanie Boyce.
“We look forward to helping develop and apply a regime that is both proportionate and effective in tackling economic crime and is workable for our members.”
The UK’s current AML regime as applied to estate agents places severe burdens on firms and has cost several high-profile agencies dearly in fines for non-compliance including Purplebricks and Countrywide.
Smaller agents are not immune either and in August three smaller agents were fined five-figure sums for failing to apply for AML registration in time, even though they had flagged up the problem rather than ‘been caught’.