A growing number of property firms appear to be showing a concerning lack of commitment when it comes to screening new customers against sanctions or politically exposed persons (PEP) lists.
Recent survey data reveals that less than a third – 29% – say they always verify new customers, while fewer than half – 47% – also freely admit to performing such checks only “on occasions”.
The comprehensive survey conducted by digital compliance firm, SmartSearch, sheds light on various aspects of compliance practices within high-street and challenger banks, crypto platforms, property developers and gambling firms.
After a year of Russian sanctions, the survey indicates that many property development firms are failing to take their onboarding procedures seriously. In fact, just over a third – 36% – have made changes to their compliance procedures since sanctions.
Earlier this year, property purchased by foreign companies were required to declare their beneficial owners on the Register of Overseas Entities (ROE), under world leading new anti-money laundering measures introduced by the government to flush out those on sanctions lists.
Martin Cheek, managing director of SmartSearch, said: “The figures reveal a larger problem with property firms and their unwise complacency towards compliance.
“These firms face the arduous task of keeping up with ever-changing compliance requirements, but simply screening new customers ‘on occasions’ is not enough.”
Cheek further emphasised the rise of PEPs in mainstream media, first through the sanctions related to the Russian invasion of Ukraine, and later Nigel Farage’s crusade against Coutts. It highlights that not all PEPs are necessarily on sanctions lists or associated with criminal networks, leaving firms with the need to make an informed decision.
As PEPs require personal banking services and the freedom to engage in property transactions, firms must exercise caution when dealing with them.
Outlining the complexities of identifying PEPs, Cheek explained: “The truth about PEPs is that they are not all easily recognisable; many of them are faceless names on a property. As a result, firms need the ability to not only flag PEPs but also make informed decisions on who they choose to do business with.”
Confused with compliance.
I got fined for lapsed money laundering…only becos I called it on my self after realising..
This is tory Britain. No one driving the ship , no reminders.. just penalising the honest.
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This government is far from being Tory.
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When the Property Industry talks about compliance, why does it fixate on KYC / AML, which is just one aspect of their compliance responsibilities and liabilities.
The article references Nigel Farage’s brush with Coutts. Ultimately the subsequent resignation of the NatWest’s CEO was due to a data protection foul up not really an AML error.
So whilst property business’s, (legal firms and banks) focus on AML, when was the last time they reviewed their information security and data protection governance frameworks and compliance? In our experience many professional services firms remain ignorant of their legal and regulatory responsibilities and are uncompliant. “So what,” I hear you say. Well as Coutts (NatWest) found, it just takes one disgruntled data subject to kick off and refuse to go away until their concerns are addressed to topple a CEO.
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Marc Da Silva calls it, “Nigel Farage’s crusade against Coutts”. Would he call is a crusade if he was de-banked?
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