Letting agents need to meet new reporting obligations as part of the UK Financial Sanctions Regulations – with the new rules coming on 14 May.
Under the Financial Sanctions Regulations, certain businesses – referred to as ‘relevant firms’ are subject to reporting obligations – and from 14 May these rules are being extended to include letting agents.
Financial sanctions are measures implemented by the UK government designed to support national security and foreign policy objectives. They include asset freezes and restrictions on financial activities involving individuals or entities listed as designated persons (DPs).
Under the regulations any ‘relevant firms’ which ‘knows or has reasonable cause to suspect’ that someone is either a designated person or has committed a breach of financial sanctions regulations must report it to the Office of Financial Sanctions Implementation (OFSI) as soon as possible.
When do checks need to be made?
- At the point you (the letting agent) receive instruction from a prospective landlord and begin doing work for them. If in the course of that work you find out they are a designated person or have breached financial sanctions, you should report this to OFSI
- You don’t have to report a prospective tenant as being someone who is a designated person or has breached financial sanctions until such a point as the prospective tenant’s offer is accepted by the landlord.
- If you are carrying out work in response to instructions from a prospective tenant to find them somewhere to rent, then similarly you only have to report the prospective tenant or landlord if you believe them to be a designated person or committed breaches of financial sanctions once they are concluding an agreement.
See the following guides for further information;
- UK financial sanctions guidance – GOV.UK
- Money laundering supervision for letting agency businesses – GOV.UK
SWLA are in the process of adding Anti Money Laundering and Sanction Checking as a service to members – via our SWLA/FLS tenancy referencing site, at a discounted cost.
In the meantime, should you require a professional Anti Money Laundering or Sanction Check carried out, you can do so externally with companies such as FCC Paragon – AML Check services | FCC Paragon
