The Money Laundering Regulations 2003 came into effect on 1 March 2004. They now apply not only to professionals offering investment advice or arranging mortgages, but also to practitioners carrying out estate agency work and dealers in goods of any description where this involves accepting payment in cash of £10,000 or more (for example auctioneers). Professionals caught by the regulations have to ensure that they maintain certain administrative and training procedures to ensure compliance.
In addition, all practitioners must comply with the Proceeds of Crime Act 2002 ("POCA"). So, even if the Regulations do not apply to you, you must ensure that you do not help a criminal to launder the proceeds of their crime, where you know or suspect that they are dealing directly or indirectly with the proceeds of crime, or risk committing a criminal offence. A defence exists if you make an authorised disclosure to a person nominated by your employer or to the National Criminal Intelligence Unit. Remember that the act contains no cut off or minimum amount in relation to criminal property, so even a £10 tax evasion is covered!
RICS has produced several guidance notes for practitioners on both the Regulations and the POCA. These are available at www.rics.org.
BLG’s Surveyors and Valuers Liability Team held a seminar on 17 May 2004 led by Jonathan Fisher QC. Jonathan is a member of 18 Red Lion Court Chambers and has a great deal of experience of money laundering work. The focus of the seminar was the potential ramifications of the Regulations for those involved in surveying, valuation and property management. The main points arising from the seminar are:
- The scope of the Regulations are suprisingly wide and you do not have to be holding or dealing with client funds in order to come within the Regulations.
- It is crucial to be alive to the reporting obligations imposed by the Regulations in order that you do not unwittingly fall foul of the Regulations, with potentially severe consequences.
- Breach of the Regulations could lead to civil liability exposures and practitioners should have this in mind in the overall context of risk management.
