Finance Monthly. 29 Bus i ne s s & Economy However, the new Economic Crime (Transparency and Enforcement) Act 2022 requires overseas firms with property in the UK to register with Companies House by 31 January 2023. Aside from the above, there is a blasé attitude from a number of property firms that they believe they will never be caught out and therefore prefer not to engage in the required resource to ensure they abide by the UK AML regulations. Where such an attitude does not exist, it is usually a simple case of the firm not having the financial capability to employ the right individual to carry out the role or the firm believing they have adequate policies and procedures in place as well as the personnel - even if a little lacking. Is the government doing enough to support the property industry, and if not, what steps should it be taking? Firstly, it is important to be clear on the facts – the UK has in place Money Laundering Regulations which, depending on the type and category of the firm, it expects all firms to act in accordance with these regulations. The Regulations are UK statutes and therefore penalties are issued for noncompliance. The onus remains on each firm to ensure it operates within the regulations. These regulations alongside industry-wide guidance provide a framework within which firms are expected to conduct its business. The UK Government has recognised the need for further specific regulation where it is clear that the current regulation does not cater for certain scenarios or loopholes. To this end, the government has introduced a plethora of legislation and reforms and property firms should avail themselves of this information by employing competent personnel to ensure they are operating within the regulations. Many companies are investing in AML technology. Is it an effective solution for ensuring customer due diligence, record keeping and the reporting suspicious activity? Technology is positively impacting the economic world globally, and in most industry sectors it speeds up operations and efficiencies without impacting accuracy. Anti–Money Laundering technologies can play a valuable role in enabling property firms to tighten their policies and in flagging potential criminal activity, but such technology can only work effectively alongside experienced Compliance Professionals who have the capabilities to spot the warning signs and other potential red flags. The client due diligence process has come a long way in terms of digitisation. This is only set to improve and ensure every aspect in the CDD process is fully electronic. However, it seems that the young, disruptive and innovative financial institutions and firms are more successful in ensuring the CDD process is almost 99% electronic. In relation to record keeping, a lot of firms have automated their processes and have sought to go paperless where they are able. However, there are instances where it is still not fully developed and therefore firms should still make adequate arrangements for records that are not yet fully electronic. Many firms have sought to improve their own internal suspicious activity reporting moving from a more manual process, however, the ability to do this has depended on the firm’s financial resources to implement such electronic systems. In conclusion, there are many benefits in investing in AML technology, however, the scale to which this can be done will always depend on the scale and resources of the individual firm. If a property company is concerned that they are not doing enough to meet their AML obligations, what would you advise them to do? The first steps are recognising and acknowledging that there is an issue that needs to be rectified and that it is brought to the attention of the Board and Senior Management. The Board and Senior Management must ensure that it hires a dedicated Compliance Professional with sufficient seniority and independence to carry out the role effectively. The firmmust ensure the Compliance Professional is competent. The firm should seek to hire a competent individual / s who will carry out a number of tasks including ensuring there is a robust Financial Crime Framework & Compliance Strategy developed and implemented.
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