Property (or real estate) is one of the industries that fall into the category of needing to understand their customers. Under the Money Laundering Regulations 2017, estate agents are required to assess their business relationships and apply appropriate checks to ensure they understand their customer.
KYC (Know Your Customer) checks are something most of us have come across before - from opening a bank account; to buying a house yourself.
What checks are required?
There are several avenues of enquiry you should be including in your checks, such as:
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Identifying and verifying the identity of all sellers and buyers in the transaction
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Conducting on-going monitoring of the relationship and ensuring the transactions are legit and in line with what’s expected as part of the relationship.
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Keeping records of the checks carried out, and carrying out further or repeat checks when there are changes.
What about business transactions?
If the buyer or seller is a business rather than an individual there are a few things you would need to consider.
This can include checks on the persons with significant control of the business (knowns as PSC’s). This can help highlight any areas of caution with those running the business itself. The level of checks should depend on your own assessment, but things such as Digital ID checks and Document Verification checks can help reduce the risk in these areas.
Tools such as ML Verify can also help identify Politically Exposed Persons (PEP’s) and those on the Financial Sanctions list, which you should also be identifying as part of your risk assessment.
Streamline your operations
It can be a pain putting processes in place for your checks, but utilising tools like ML Verify can help make things smoother by introducing automated checks for PEP’s and sanctions. Digital checks can also be carried out in a few clicks too.