The latest UK Anti-Money Laundering (AML) National Risk Assessment (2020) assessed the UK’s property sector as high risk for money laundering (ML). It attributes this to certain attributes and features of the sector, market participants and transactions undertaken within it, for example:

• Transactions frequently involve the (international) transfer of large volumes of money;
• Parties instructing transactions often have access to considerable private/public funds; and
• Transactions often involve ‘gatekeepers’, eg, lawyers/notaries/accountants, who may exploit their professional status to mask illicit activity.

The sector therefore faces multifaceted challenges when it comes to ML prevention. To tackle these, estate and lettings agents and professional services providers all fall within the regulatory perimeter of the UK Money Laundering Regulations (MLRs). Further, on 26 July, the Financial Action Task Force (FATF) published the new Risk-Based Approach for the Real Estate Sector to act as a call to action and to support the sector’s multiple players in understanding their risk exposures, developing mitigating controls and bolstering the UK’s national AML strategy. The guidance provides comprehensive and practical steer for applying a risk-based approach (RBA) to AML compliance in the property sector. Some of the fundamental concepts for consideration are as follows:

1. ML risk assessment