What this means for agents
The Money Laundering and Terrorist Financing (Amendment) Regulations 2023 say the starting point for agents and other regulated firms should be to treat domestic (UK) PEPs, their family members and close associates as inherently lower risk than non-domestic PEPs, and therefore apply a lower level of enhanced due diligence to domestic PEPs unless other risk factors are present.
Although the statutory regulations are new, Financial Conduct Authority guidance has featured this approach for some time.
The UK Government says that despite this, several people in prominent public positions have had problems accessing financial services because of their status as politically exposed persons under the regulations, as have their family members.
The regulatory change has been made to make sure that banks and other regulated firms take a proportionate and risk-based approach to the treatment of domestic PEPs, in line with the UK Government’s broader approach to anti-money laundering and counter-terrorism financing (AML/CTF) controls.
AML supervision reform still under consideration
HM Treasury ran a consultation in the summer of 2023 seeking views on four potential models for reform of the UK’s AML/CTF supervisory system, in response to which Propertymark strongly supported the Office for Professional Body Anti-Money Laundering Supervision (OPBAS+) model.
Propertymark has long argued for the consolidation of supervision and promoted the role of professional bodies as supervisors because they understand the sectors they work in and can gather information about developing risks. A strengthened OPBAS could play a greater role in facilitating and reporting on the exchange of information between supervisors within and across different sectors.
The consultation closed at the end of September 2023 and HM Treasury is currently analysing the feedback before publishing the next steps.
Supporting member compliance
Propertymark produces a range of resources, including training, factsheets, and how-to guides to support members with anti-money laundering compliance. Our Calm About Compliance service offers further reassurance with experienced agency auditors available to advise which will help avoid pitfalls that can lead to enforcement action.