Hart & Co is committed to ensuring that it has adequate controls to counter money laundering activities and terrorist financing activities, in line with Statutory Instrument No.692 Financial Services, The Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017.
Hart & Co is committed to staff training in anti-money laundering legislation which includes how to deal with suspect transactions. Ian Hart is the Money Laundering Reporting Officer (MRLO).
Risk Assessment & Customer Due Diligence
Whilst Hart & Co take the starting point that most clients will not launder money, we do identify criteria that may indicate a higher risk of money laundering – e.g. where there is no face-to-face meeting to establish identity.
Risk sensitive policies and procedures have been established in order to anticipate and prevent money laundering and terrorist financing. Hart & Co make enquiries about the client, the source of funds and the purpose and nature of the transaction so an initial assessment of the money laundering risk can be made. Hart & Co will also produce a written risk assessment and will continue to assess risk throughout the relationship. Adherence to the “Due Diligence” identification procedures on every occasion mitigates the risks of the business being used to launder money or fund terrorism.
In respect of Vendors: Hart & Co verify all Vendors at the start of any matter before accepting instructions to market their property/business. With probate work Hart & Co verify the identity of all Executors (if more than one).
In respect of Purchasers: Hart & Co verify all Purchasers. Checks are carried out on purchasers at the start of the business relationship once an offer has been accepted by a vendor and before sending out Memorandum of Sale.
It is Hart & Co’s policy that all vendors and purchasers must be identified fully with a minimum of two forms of ID, evidence of identity being official photographic (passport/driving licence) and also evidence of residence e.g. a utility bill dated in the last three months.
Should a face to face meeting not take place then enhanced due diligence procedures are adopted by asking for additional information or evidence to establish identity, and ensuring that the documents supplied are certified.
If the verification of identity is done by documents this should be based on:
A government issued document with full name and photo, date of birth or residential address such as:
- a valid passport
- a valid photo card driving licence
- a national identity card
Where the individual doesn’t have one of the above documents, or doesn’t meet the criteria in the risk assessment, we will require the following:
- A Government issued document (without a photo) which includes the client’s full name and also secondary evidence of address, for example an old style driving licence or recent evidence of entitlement to state or local authority funded benefit such as housing benefit, council tax benefit, pension, tax credit.
- Secondary evidence of address (not downloaded from the internet) for example a utility bill, bank, building society or credit union statement or a most recent mortgage statement.
For clients who are not private individuals, such as corporate clients and private companies, the business must obtain information that is relevant e.g. company registration number, registered address and evidence that the individuals have the authority to act for the company – a search at Companies House will reveal details of directors and company secretary. The above requirements for documentation will be applied to all shareholders holding 25% or more of a business.
For private clients acting as a Representative of an Estate we will require either;
- Grant of Probate
- Letter of Administration
- Individual identity evidence for the personal representative either executor or administrator in the case
Simplified Due Diligence – Low Risk Clients and Matters
Generally, if a client/matter is considered low risk for money laundering (for example because the client is well known and reputable or well regulated) Hart & Co may take a proportionate approach to due diligence.
Politically Exposed Persons (PEPs)
A PEP is a person who is entrusted with prominent public functions. If a client is a PEP Hart & Co will take adequate measures to establish source of wealth and source funds involved in the transaction and must conduct enhanced ongoing monitoring of the business relationship.
Hart & Co are required to maintain records (including records of client identification and about their transactions) for at least five years from the end of the business relationship with the client. Personal data received from clients is protected by Data Protection Law. It will only be used or processed for the purposes of preventing money laundering.
Suspicious Activity Reporting
The Money Laundering Reporting Officer who, believes there are grounds to suspect money laundering or terrorism, will make a Suspicious Activity Report (SAR) to the National Crime Agency (NCA)
What is Suspicious Activity?
- Cash – any party proposes to pay significant sums in cash.
- Unexplained transfer of funds. Transferring to Hart & Co bank account then asking to transfer to another.
- Money being paid direct between parties and not via solicitors or agents.
- Transaction being completed by the parties without the involvement of Solicitors.
- A transaction which has no apparent purchase and which makes no economic sense.
- Unusual transaction. Where the transaction is without reasonable explanation out of the range of services one would expect to provide to that client or outside the experience of Hart & Co.
- Secretive clients. The client refuses to provide requested information without reasonable explanation including Client ID information
- Unusual sources of funds. Funds will normally be paid from an account in the payer’s own name maintained with a recognised and reputable financial institution. If payments are made by a third part or from abroad this may be of a concern.
- Transactions where the source of wealth is unclear. Large amounts of money provided by a buyer who appears to have a low income.
- Insistence that the matter be completed urgently for no good reason.
- Properties owned by nominee companies, off shore companies or multiple owners where there is no logical explanation.
- The Seller is known to have committed acquisitive crimes.
- Difficulties with ID of client or beneficial owners including reluctance to attend for ID processes which may suggest impersonation.
- The property being bought in somebody else’s name other than that of the person providing the money or making the decisions. Of course people often assist relatives with purchases. However if there is no family connection or other obvious reason why the third party is providing funding. The matter should be reported.
- Any attempt to mislead lenders e.g. about the income of the borrower or the value of the property.
- The use of shell companies or nominees to own property may indicate mortgage fraud.
- The rapid re-sale of property at a markedly higher price.
- Urgency. A client wants a transaction completed as a matter of urgency for no apparent reason.
- The buyer and seller appear to be associated.
- Offer of a bribe or other inducement to complete paperwork incorrectly or to over-value property.
- Buyer has not viewed the property.
- Terrorism – Particular care should be taken where any party to a transaction is believed to have sympathies with a terrorist group.
The regulations also require Hart & Co to scrutinize transactions including where necessary, the source of funds, to ensure they are consistent with our knowledge of the client, their business and risk profile. This means staying alert and reporting any suspicious circumstances.