Know your Customer
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Our business is based on mutual trust with our clients and the counterparties (“customers”) we undertake business activity with. Due to the transactional nature of the services we provide, just like lawyers, accountants and financial services firms, all estate agents and real estate advisers are required by law to carry out Know Your Customer (KYC) checks. These checks serve to ensure that we comply with our legal obligations and help regulators to ensure that the UK real estate industry is not misused to facilitate money laundering or the financing of terrorism or criminal activities.
In the majority of cases these checks will simply involve us formally confirming your identity. Where you are buying or selling property, we will also require documentation confirming your source of funds or proof of ownership of the property and information on your source of wealth, respectively. If you live abroad or use corporate structures to hold real estate assets, further documentation will be required to identify the individuals who are in a position of control and will ultimately benefit from the transaction.
These requirements are applied universally across the real estate sector in the UK and our processes comply with the relevant legislation. We apply them to every customer who uses our estate agency services. We will never ask for more information than is required and all the information that you provide will be held in strict confidence.
1. WHAT ARE THE REGULATORY REQUIREMENTS PLACED UPON ESTATE AGENTS FOR CONDUCTING KYC?
All estate agents in the UK are required to comply with a number of laws designed to prevent illicit funds passing through the UK. These include the Proceeds of Crime Act 2002, the Criminal Finances Act 2017, the Terrorism Act 2000. The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (“5th MLD”) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR 2017”). The primary money laundering offences apply to everyone, and you commit an offence if you know or suspect that the property is criminal property.
Real estate transactions are seen by the UK Government and crime agencies as posing a particularly significant money laundering threat. As such the MLR 2017 require estate agents to understand and verify exactly who their customers are and have evidence that they have completed KYC checks. Should an estate agent become suspicious of a prospective customer or existing customer’s activities engaging in money laundering or terrorist financing activity, it must report this to the National Crime Agency.
We take our anti-money laundering responsibilities very seriously and believe that the laws governing the UK property industry are critical tools in the fight against organised crime and terrorist financing. If we did not complete KYC checks we would undermine our corporate responsibilities and also place ourselves and you at risk of prosecution.
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