Anti-Money Laundering (AML) Risk Assessment, Policy, and Procedure
Randalls Property Agents Ltd
Date of Issue: May 2025
Last Reviewed: 13/05/2025
Supervised by: HM Revenue and Customs (HMRC)
Money Laundering Reporting Officer (MLRO): Twiz Stripp
1. Introduction
Randalls Property Agents Ltd (“Randalls”) is a UK-based estate and letting agency business engaged in property sales, lettings, and related services. As a business regulated under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, Randalls is committed to preventing money laundering and terrorist financing. This document outlines our risk-based approach to compliance, including a firm-wide risk assessment, policies, controls, and procedures to mitigate risks, as required by HMRC and aligned with the National Risk Assessment (NRA) 2020 and other guidance.
This policy applies to all employees, contractors, and agents acting on behalf of Randalls, particularly in transactions involving:
  • Property sales (estate agency activities).
  • Lettings with a monthly rent of £10,000 or more (equivalent to approximately £9,000, subject to exchange rate fluctuations).
  • Any other activities falling under the MLRs.
2. Risk Assessment
2.1 Purpose
The risk assessment identifies and evaluates the money laundering and terrorist financing risks to which Randalls is exposed, enabling the implementation of proportionate controls. It is reviewed annually or when significant changes occur (e.g., new regulations, business expansion, or emerging risks identified in the NRA or HMRC guidance).
2.2 Methodology
The risk assessment follows a risk-based approach, considering:
  • Customer Risks: Types of clients, their backgrounds, and behaviours.
  • Geographical Risks: Jurisdictions involved in transactions.
  • Transactional Risks: Nature, size, and complexity of transactions.
  • Delivery Channel Risks: Face-to-face vs. remote interactions.
  • Product/Service Risks: Specific services offered (e.g., sales, high-value lettings).
2.3 Risk Identification
Based on the NRA 2020, HMRC guidance, and Randalls’ operations, the following risks have been identified:
2.3.1 Customer Risks
  • High-Risk Clients:
    • Politically Exposed Persons (PEPs), their family members, or close associates.
    • Clients from high-risk third countries (as listed by the EU or Financial Action Task Force [FATF]).
    • Clients using complex ownership structures (e.g., shell companies, trusts, or overseas entities).
    • Clients reluctant to provide identification or source of funds information.
  • Medium-Risk Clients:
    • Overseas buyers or tenants, particularly in high-value London properties.
    • Clients with no face-to-face interaction (online-only relationships).
  • Low-Risk Clients:
    • Domestic clients with transparent funding sources and straightforward transactions.
2.3.2 Geographical Risks
  • Transactions involving jurisdictions with deficient AML/CTF regimes (e.g., FATF grey or black list countries).

  • Properties or clients linked to high-risk areas within the UK (e.g., London, where £6.7bn of property was purchased with questionable funds between 2016–2022).

  • Cross-border transactions with unclear fund origins.
2.3.3 Transactional Risks
  • High-value property sales (e.g., £5m+), which are attractive for laundering large sums in single transactions.
  • Lettings with monthly rents ≥ £10,000, particularly commercial properties or luxury residential units in urban centres like London or Manchester.
  • Transactions involving cash payments or rapid, unexplained changes in ownership.
  • Transactions lacking commercial sense or involving uncommercial penalties.
2.3.4 Delivery Channel Risks
  • Online-only interactions increase the risk of identity fraud.
  • Reliance on third parties (e.g., introducers) who may not conduct thorough due diligence.
  • Use of electronic verification tools without a proper understanding or validation.
2.3.5 Product/Service Risks
  • Estate agency services facilitate property sales, which are high-risk due to the large sums involved.

  • Letting agency services for high-value rentals (≥ €10,000/month), newly included under 5MLD since January 2020.

  • Potential for shell companies to obscure beneficial ownership in lettings.
2.4 Risk Evaluation
Risk Category
Likelihood
Impact
Overall Risk
Mitigation
High-Risk Clients
Medium
High
High
Enhanced Due Diligence (EDD), MLRO approval
Geographical Risks
Low
High
Medium
EDD for high-risk jurisdictions, source of funds checks
Transactional Risks
Medium
High
High
Ongoing monitoring, SAR reporting
Delivery Channels
Medium
Medium
Medium
Robust ID verification, staff training
Product/Services
High
High
High
Risk-based CDD, regular audits
2.5 Emerging Risks

  • Increased use of overseas shell companies to disguise beneficial ownership, as highlighted in the NRA 2020.

  • Potential for lettings to be used for laundering via rental payments between colluding landlords and tenants.

  • New financial sanctions reporting obligations will be effective in May 2025, requiring reports to the Office of Financial Sanctions Implementation (OFSI).

3. Anti-Money Laundering Policy
3.1 Commitment
Randalls is committed to:
  • Complying with the MLRs and related legislation (e.g., Proceeds of Crime Act 2002, Sanctions and Anti-Money Laundering Act 2018).
  • Preventing the facilitation of money laundering or terrorist financing.
  • Implementing a risk-based approach to identify, assess, and mitigate risks.
  • Training all staff to recognise and report suspicious activities.
  • Maintaining robust records and reporting procedures.
3.2 Scope
This policy applies to:
  • All employees, contractors, and agents of Randalls.
  • All business relationships and transactions, including property sales and lettings ≥ £10,000/month.
  • Interactions with clients, beneficial owners, and third parties.
3.3 Money Laundering Reporting Officer (MLRO)
  • Appointed MLRO: [Insert Name, Contact Details].
  • Role:
    • Oversee AML compliance and implementation of this policy.
    • Receive and evaluate internal Suspicious Activity Reports (SARs).
    • Submit SARs to the National Crime Agency (NCA) when required.
    • Maintain a log of internal SARs and decisions.
    • Ensure staff training and policy updates.
3.4 Key Obligations

  • Register with HMRC for AML supervision (mandatory for estate and letting agency activities).

  • Conduct Customer Due Diligence (CDD) and, where applicable, Enhanced Due Diligence (EDD).

  • Maintain records for at least 5 years.

  • Report suspicious activities promptly to the MLRO and, if necessary, the NCA.

  • Comply with financial sanctions reporting to OFSI from May 2025.

4. Procedures
4.1 Customer Due Diligence (CDD)
CDD is mandatory for all clients (buyers, sellers, landlords, and tenants) involved in:
  • Property sales.
  • Lettings with monthly rent ≥ £10,000.
  • Any transaction with a higher risk of money laundering.
4.1.1 Simplified Due Diligence (SDD)
  • Applied in low-risk situations (e.g., domestic clients with transparent funding).
  • Requirements:
    • Identify the customer (name, address, or date of birth).

    • Use at least one authoritative document (e.g., a passport).

  • Document the rationale for applying SDD.
4.1.2 Standard Due Diligence
  • Applied in most cases.
  • Requirements:

    • Verify client identity using government-issued ID (e.g., passport, driving license) and proof of address (e.g., utility bill, bank statement).

    • Understand the purpose and nature of the business relationship.
    • Identify beneficial owners (e.g., those controlling a company or trust).
    • Obtain the source of funds information for transactions.

  • Electronic verification tools (e.g., Creditsafe, Credas) may be used, but staff must validate results.

4.1.3 Enhanced Due Diligence (EDD)
  • Applied in high-risk situations, including:
    • PEPs or their associates.
    • Clients from high-risk third countries.
    • Non-face-to-face transactions.

    • Transactions with unusual patterns or no commercial sense.

  • Additional Steps:
    • Obtain detailed source of funds and wealth evidence (e.g., bank statements, tax returns).
    • Verify beneficial ownership through HM Land Registry or Companies House.
    • Seek MLRO approval before proceeding.
    • Conduct ongoing monitoring throughout the relationship.
4.1.4 Timing
  • CDD must be completed:
    • Before establishing a business relationship or transaction.
    • Upon suspicion of money laundering or terrorist financing.
    • When existing CDD information is inadequate.

    • For lettings, upon new or renewed tenancies from January 2020.

  • Ongoing CDD is required for high-risk clients or long-term relationships.
4.2 Risk-Based Monitoring
  • Transaction Monitoring:
    • Review transactions for unusual patterns (e.g., rapid ownership changes, large cash payments).

    • Cross-reference the Title Register documents for ownership inconsistencies.

  • Client Monitoring:
    • Update CDD records periodically, especially for high-risk clients.
    • Reassess client risk if new information emerges (e.g., sanctions lists, NRA updates).
4.3 Suspicious Activity Reporting (SAR)
  • Internal Reporting:
    • Staff must report any knowledge, suspicion, or reasonable grounds for suspicion of money laundering or terrorist financing to the MLRO immediately.
    • Use the internal SAR template (Appendix A).
  • MLRO Actions:
    • Evaluate the report and decide whether to submit an external SAR to the NCA.

    • Submit SARs via the NCA’s online portal before a transaction proceeds, where possible.

    • Maintain a confidential log of all SARs and decisions.

  • Sanctions Reporting:

    • From May 2025, report suspected breaches of financial sanctions to OFSI.

  • Confidentiality:
    • Staff must not disclose SAR submissions to clients (“tipping off”), as this is a criminal offence under the Proceeds of Crime Act.
4.4 Record Keeping

  • Retain all CDD, transaction, and SAR records for 5 years from the end of the business relationship or transaction.

  • Store records securely (e.g., encrypted digital storage) to comply with data protection laws.

  • Destroy records confidentially after 5 years, unless required for ongoing investigations.

  • Conduct annual audits of branch compliance, especially for multi-branch operations.

4.5 Staff Training
  • Frequency: All staff must receive AML training upon induction and annually thereafter.
  • Content:
    • Recognising money laundering and terrorist financing risks.
    • Understanding CDD, EDD, and SAR procedures.

    • Identifying red flags (e.g., reluctance to provide ID, unusual ownership patterns).

    • Updates on regulatory changes (e.g., 5MLD, sanctions reporting).
  • Delivery:
    • In-person or online training sessions.

    • External resources (e.g., Propertymark AML training) may be utilised.

  • Evidence:
    • Maintain training records, including dates and content covered.
    • Staff must sign a compliance acknowledgement form (Appendix B).
4.6 Internal Controls
  • Policies and Procedures:
    • Documented in this policy and communicated to all staff.
    • Reviewed annually or upon regulatory changes.
  • Audits:

    • Conduct internal compliance audits twice yearly to test controls.

    • Larger branches must audit compliance independently.

  • Technology:

    • Use AML software (e.g., Credas, Veya) for identity verification, ensuring staff understand its limitations.

  • HMRC Registration:
    • Ensure continuous registration with HMRC for AML supervision.

    • Pay applicable fees and pass fit-and-proper tests for key personnel.

4.7 Red Flags
Staff must be vigilant for:
  • Clients are reluctant to provide ID or source of funds.
  • Properties with frequent, unexplained ownership changes.
  • Transactions involving shell companies or complex structures.
  • Payments from high-risk jurisdictions or in cash.

  • Clients are paying high rents to themselves via shell companies.

  • Inconsistencies in the provided information or hesitations during CDD.

5. Compliance Monitoring and Review
  • MLRO Responsibilities:
    • Monitor compliance with this policy and report findings to senior management.
    • Update the risk assessment and procedures based on HMRC, NRA, or FATF guidance.
  • Annual Review:
    • Review the risk assessment, policies, and procedures by [Insert Date, e.g., May 2026].
    • Incorporate feedback from HMRC inspections or audits.
  • HMRC Inspections:
    • Prepare to provide the risk assessment and records upon request.

    • Note that HMRC conducted 2,000 interventions in 2019–2020, issuing £9.1m in penalties.

6. Consequences of Non-Compliance
  • Legal Penalties:

    • Failure to register with HMRC or comply with MLRs may result in civil penalties, unlimited fines, or up to 2 years’ imprisonment.

    • HMRC fines ranged from £1,250 to £175,701 for AML breaches between October–December 2023.

  • Reputational Damage:
    • Non-compliance risks loss of client trust and business reputation.
  • Internal Disciplinary Action:
    • Staff failing to follow this policy may face disciplinary measures, up to and including termination.
7. Appendices
Appendix A: Internal SAR Template
Field
Details
Date of Report
Reporting Staff Member
Client Name
Transaction Details
Nature of Suspicion
Supporting Evidence
MLRO Decision
[To be completed by MLRO]
Appendix B: Staff Compliance Acknowledgement Form
I, [Employee Name], confirm that I have read and understood the AML Policy and Procedure for Randalls Property Agents Ltd. I agree to comply with all requirements, including CDD, SAR reporting, and training obligations.
Signed: _________Twiz Stripp________________
Date: ________15/05/2025___________________
8. References

  • HMRC Guidance: Estate and Letting Agency Business Guidance for Money Laundering Supervision.

  • Propertymark: Money Laundering Regulations and related resources.

  • GOV.UK: Risk Assess Your Business for Money Laundering Supervision.

  • Credas: AML Guidance for Estate Agents.

  • National Risk Assessment of Money Laundering and Terrorist Financing 2020.