On 1 April 2014, the OFT's anti-money laundering powers and responsibilities pass to the Financial Conduct Authority (in respect of Consumer Credit Financial Institutions), and to Her Majesty's Revenue and Customs (in respect of businesses that carry on estate agency work). The OFT will continue to supervise consumer credit financial institutions and estate agency businesses until 31 March 2014.
If you are already registered with the OFT then your registration will automatically transfer to HMRC and they will contact you after 1 April. Further information about HMRC and anti-money laundering.
If you are not currently registered with the OFT then you need to follow the OFT guidance below.
From 1 April the FCA will become the supervisor of CCFIs under the Money Laundering Regulations 2007. You will need to be authorised by the FCA if you wish to provide consumer credit.
The FCA does not require you to register separately for AML but you will be required to have systems and controls in place to prevent your firm being exploited by criminals such as fraudsters and money launderers. Unless you are a sole proprietor you will also need to appoint a Money Laundering Report Officer (MLRO) who must apply to the FCA to be an 'approved person'. You can find more information on the FCA's consumer credit regime and its financial crime obligations at the following web pages:
Until 31 March 2014, the OFT will continue supervising estate agency businesses and CCFIs to ensure they are meeting their legal obligations regarding money laundering and terrorist financing. To comply with the Regulations businesses will need to register with the OFT.
These pages outline our role and provide information for businesses supervised by the OFT until 31 March 2014.
Until 31 March 2014, the OFT is the supervisory authority for:
Further information on whether you are supervised by the OFT can be found in Who is my supervisor FAQs (pdf 157kb).
It is the intention of the Regulations that, where possible, the businesses they cover will be regulated by only one supervisor in line with principles of good regulation. The Regulations recognise that there may be some business models that have more than one supervisory authority. Where it is appropriate, the supervisory authorities may agree who will take responsibility for either a particular business or category of businesses. Such businesses will then have to register only with the agreed supervisory authority. For OFT agreements with other supervisors covering individual businesses, see Agreement on Supervisory Overlaps (pdf 51kb).
Until 31 March 2014, if you are supervised by the OFT you need to:
1. Register with the OFT - see Registration page.
2. Comply with the Regulations - a copy is available on the legislation.gov.uk website and the OFT implement policies and procedures including
3. Make Suspicious Activity Reports (SARs) as appropriate - a disclosure of either suspicion or knowledge that money laundering or terrorist financing is or has taken place or that another person is engaged in money laundering or terrorist financing activity.
If a business is submitting a SAR but wishes to proceed with the transaction it must seek 'consent' from the National Crime Agency (NCA) (formerly known as the Serious Organised Crime Agency) in order to proceed. This is done by ticking the 'consent required' option on the SAR and whether the disclosure is through the Proceeds of Crime Act 2002 or the Terrorism Act 2000. 'Consent' has two purposes:
Guidance on 'consent' is available on the NCA website.
4. Sanctions and Jurisdictions of Concern - HM Treasury publishes Advisory Notices regarding the risks posed by unsatisfactory money laundering controls in a number of non EEA jurisdictions. Estate agents and CCFIs are required to apply enhanced customer due diligence and enhanced ongoing monitoring on a risk-sensitive basis in certain defined situations and in 'any other situation which by its nature can present a higher risk of money laundering or terrorist financing'. Therefore your risk assessment may need to take into account the information and advice detailed in the Advisory Notice regarding certain specified jurisdictions.
Advisory notices are available from www.gov.uk/government/publications/money-laundering-and-terrorist-financing-controls-in-overseas-jurisdictions-advisory-notice.
The Counter-Terrorism Act (the Act) came into force in December 2008 but the Act is unlikely to impact on many businesses supervised by the OFT. This Act provides HM Treasury with the ability to direct financial firms, including CCFIs, to undertake a graduated range of financial restrictions on business connected with jurisdictions of concern regarding money laundering and terrorist financing. For further information see the HM Treasury website. Information on Financial Sanctions can be found here: www.gov.uk/sanctions-embargoes-and-restrictions and the consolidated list can be accessed directly at: www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets.
The Act is available on the legislation.gov.uk website.
Download the OFT's Money Laundering Regulations 2007: core guidance (pdf 160kb). This guidance was developed with industry representatives from the estate agency and consumer credit sectors.
The Joint Money Laundering Steering Group (JMLSG) which is made up of industry trade associations has published guidance on businesses' legal obligations. This guidance is aimed at business in the financial sector and can be found on the JMLSG website.
The National Housing Federation has produced guidance for its members which has also been adopted by Community Housing Cymru, and the Northern Ireland Federation of Housing Associations. See National Housing Federation anti money laundering guidance.
The National Federation of Property Professionals, in conjunction with the Royal Institution of Chartered Surveyors, the Association of Relocation Professionals and the Association of Residential Managing Agents, has produced guidance for members of these associations. See National Federation of Property Professionals money laundering guidance.
The OFT takes a risk based approach to supervision and will provide advice on compliance with the Regulations through the production of guidance, the provision of workshops and visits to businesses. Businesses that fail to put in place adequate anti-money laundering systems and controls may be subject to enforcement action including warning letters, civil financial penalties or prosecution for breaches of the Regulations. See:
Under separate agreements, the OFT may share monitoring and enforcement powers with Local Authority Trading Standards Services (TSS). Even when agreements are not in place we will work with TSS and act on information of non-compliance that we receive. TSS already have the power to prosecute any supervised business for a breach of the Regulations.
Money laundering is the process by which criminally obtained money or other assets (criminal property) are exchanged for money or assets with no obvious link to their criminal origins. In the hands of the thief or money launderer, the converted funds or other assets always represent criminal property. It also covers money, however come by, which is used to fund terrorism.
The aim of the Money Laundering Regulations 2007 (the Regulations) is to detect, deter and disrupt financial crime and terrorist financing by reducing the possibility of legitimate businesses being used for money laundering or terrorist financing.
The OFT supervises certain categories of business to ensure they are meeting their legal obligations regarding money laundering and terrorist financing. To comply with the Regulations businesses will need to register with the OFT.
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