Money Laundering in Conveyancing - What you need to know!
Posted on 20th January 2020 at 10:17
How the money laundering rules affect you when buying and selling!
You may just want to buy or sell your home, but it is also important to think about money laundering, what it means and what you have to do to satisfy the regulations. Did you know:
• Money laundering is the third biggest industry in the world.
• Residential property transactions have made up a vast majority of all suspected money laundering activity in the last three years (as reported to the National Crime Agency)
• Solicitors can go to prison and incur heavy fines if they don’t report suspicious activity
The anti-money laundering rules for law firms are very strict. So, money laundering has a real impact on how Competent Firms handle conveyancing transactions.
What does money laundering mean?
Money laundering means putting money from illegal activities into the legitimate economy, so in other words, the money becomes clean. Conveyancing firms are a prime target for money laundering as transactions are often for large sums of money.
Money Laundering can take a number of forms:
1. Undeclared rental income
2. Undeclared capital gains tax or corporation tax income.
3. Drug trafficking
4. People trafficking to name a few.
Why ID checks are so strict
One of the most important aspects of the anti-money laundering rules is client identification. It’s the first thing we do when you instruct us to act for you; without satisfactory ID, we can’t proceed.
When we ask for your ID at the start of the process, we have to check the following:
• That you are who you say you are
• If you are selling a property, that you are the owner of the property
• If you are buying a property, that the funds you are using are from a legitimate source
As well as visual check on photo ID, we analyse all clients through an electronic ID verification system.
If you are selling a property, we check the Land Registry for details of who is registered as the owner.
If you are buying, we ask for a minimum of 12 months of bank statements and will query if the source of funds for the deposit isn’t clear. When someone else has given you your deposit funds (e.g. a parent or other family member) or you have moved money between accounts this means us asking for more information.
We understand this may seem intrusive, but we have to track where the money came from originally to satisfy the money laundering regulations so that the transaction can proceed.
Without sufficient information a competent Solicitor will not allow the transaction to proceed, so it is really important that you get this information to your Solicitor as early as possible to avoid unnecessary delays.
How Money Laundering Rules affect Solicitors and Conveyancers
Solicitors who don’t follow the rules are at risk of very heavy penalties, including jail time and or heavy fines.
So, you’ll understand why we’re so scrupulous about the checks!
Contact our team on 0113 2007480.
Tagged as: Residential Conveyancing
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