In the bustling world of conveyancing transactions, there is a crucial safeguard working quietly behind the scenes: Anti-Money Laundering (AML) compliance. Despite its understated presence, AML regulations are essential for ensuring the integrity and legality of property transactions. Money laundering is defined in the Proceeds of Crimes Act 2002 (POCA) as “the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises”.
Conveyancers' obligations under Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 therefore imposes responsibilities to conduct thorough examinations to validate the identity of clients and ascertain the legitimacy of their source of funds and/or assets. Although these investigations may occasionally result in delays and client frustration at the outset of the conveyancing process, Anti-Money Laundering checks are considered a fundamental priority for all Law Firms.
Now, you might be thinking, "But I am just buying or selling a property. Why would this affect me?" As highlighted by The National Risk Assessment of Money Laundering and Terrorist Financing 2020, the legal sector is a hotbed for potential money laundering activities, in particular within the realm of conveyancing. The exchange of large sums of monies and complex ownership structures creates an ideal environment for money launderers seeking to cleanse illicit funds through property transactions. Examples include, and are not limited to, transactions of an unusual nature; funds coming from an unusual source/ party; inability to explain source of funds from a third party or being secretive or withholding information.
This places great responsibility on Conveyancers, and, as a result, they must employ Customer Due Diligence (CDD) measures to mitigate potential client risks. The process involves establishing a client’s identity by verifying identification and carrying out source of funds checks, if applicable. When undertaking identity checks, it is crucial that clients provide up to date information to facilitate accurate investigations from their legal advisers (see below list). This ensures that the risk is suitably managed by Conveyancers, a process which is monitored throughout the course of the transaction.
Although Conveyancers are under a duty to investigate and/or report any suspicious activity, equally paramount is ensuring that clients understand the responsibilities placed upon Conveyancers to mitigate potential risks for all parties involved. Effective communication outlining the purpose behind requested information and fostering a sense of assurance among clients are integral aspects of the conveyancing process, ultimately ensuring that the matter runs smoothly.
Overall, the relationship between Anti-Money Laundering regulations and conveyancing is a topic that is under constant inspection and review and is one that should be always considered. At John Hodge Solicitors we pride ourselves on ensuring that the integrity of the Legal profession is upheld, a responsibility facilitated through rigorous checks and due diligence over the course of Conveyancing transactions.
(A) For proof of identity, we require any ONE of the following:
- A valid full passport*(please see the NOTE below), or
- A valid H.M. Forces identity card with photograph, or
- A valid U.K. photo-card driving licence
If none of the above are available, we require any TWO of the following:
- A firearm or shotgun certificate
- A current old-style driving licence (i.e. without photograph)
- A receipted utility bill addressed to you not more than three months old
- A council rent book showing payment of rent paid for the last three months
- A mortgage statement from a mortgage lender for the mortgage accounting year just ended
- A cheque guarantee card or credit card (carrying Mastercard or Visa logo)
- American Express Diners Club Card, or a Debit Card (carrying Switch or Delta logo PLUS a statement relating to that card less than three months old)
(B) For proof of address we require ONE of the following:
- A utility bill or statement less than three months old
- A local council tax bill or statement less than three months old
- A bank or building society statement less than three months old
- A mortgage statement less than three months old
- A current benefits book
- A current certificate of house or motor insurance (provided your address is shown)
- An EC identity card
Next Steps: Get in touch
If you would like to discuss anything relating to the above then please don’t hesitate to reach out to our team of legal experts at John Hodge Solicitors, conveniently located throughout the South West, with offices in Bridgwater, Bristol, Clevedon, Wedmore, Weston-super-Mare and Yatton.
You can contact us either:
- by email
- via our website
- by calling us on 0800 097 8611
James Gass
Magdalena Neale
Samuel Turner