Government consult on extending AML rules to lettingsApril 18, 2019
Under 5MLD, the scope of obliged entities within the property sector is expanded to include the letting agency sector for high value transactions with a monthly rent of 10,000 Euros or more.
Why is this happening?
The 5MLD, which was passed in June 2018 makes amendments to the Fourth Money Laundering Directive (4MLD) which came into force on 26 June 2017.
The latest Directive contains amendments to 4MLD with the aim of improving transparency and the existing preventative framework to more effectively counter money laundering and terrorist financing across the European Union.
The requirements of 5MLD must come into effect through UK law by 10 January 2020.
What does this mean?
The UK Government need to decide who should be within the scope of the regulations, at which point customer due diligence is completed, as well as who should supervise letting agents.
Key questions asked in the consultation include:
- What other types of lettings activity exist? What activities do you think should be included or excluded in the definition of letting agency activity? Please explain your reasons and provide evidence where possible.
- Should the government choose a monthly rent threshold lower than EUR 10,000 for letting agents? What would the impact be, including costs and benefits, of a lower threshold? Should the threshold be set in euros or sterling?
- Do letting agents carry out CDD checks on both contracting parties (tenants and landlords) when acting as estate agents in a transaction?
There are eight questions in total for letting agents to answer. These can be found on page 13 of Transposition of the Fifth Money Laundering Directive consultation. The closing date for comments to be submitted is 10 June 2019.