Just to raise the tone of this blog a little, I’d like to start today with a quotation from Voltaire’s 1759 satirical novel “Candide”: “Dans ce pays-ci, il est bon de tuer de temps en temps un amiral pour encourager les autres.” In other (English) words, in this country, it is wise to kill an admiral from time to time to encourage the others. And legislators, law enforcement agencies and regulators have taken to their hearts the concept of “pour encourager les autres”. Or at least, we thought they had.
Speaking to Business Insider (“the largest business news site on the web”) on Monday this week, Mark Hayward, CEO of the [UK] National Association of Estate Agents said that estate agents are being punished with “business busting” six- and seven-figure fines under AML legislation, but that their AML supervisor – HM Revenue and Customs – is not making either the fines or the miscreants public: “Fines are not publicly being made known but, anecdotally, we know they are significant”. When asked for a response, an HMRC spokesperson said: “HMRC takes failure to comply with the Money Laundering Regulations extremely seriously, and carry out regular checks to ensure customers are correctly following the rules. Last year alone these checks led to us issuing more than 880 penalties to all sectors – including estate agency businesses – for failing to comply with the rules.” When pressed, they confirmed that HMRC does not have a breakdown of the 880 penalties by sector. I will admit that this seems unlikely to me, and presumably something that OPBAS will be on like a rat up a drainpipe.
Perhaps anticipating this unwanted drainpipe attention, HMRC is having another think. And according to trade website Property Industry EYE, an HMRC spokesperson (who knows – it may be the same one, or perhaps there’s a turf war) told them on Wednesday: “Under the new Money Laundering Regulations, HMRC is developing a policy to publish details of those not complying with the MLRs. On a case-by-case basis, HMRC will consider whether publishing would be disproportionate or if the penalty is of a minor nature and this will inform whether we publish penalty information with full identity details, anonymously or not at all. This policy is due to be implemented shortly.”
Personally, I think the scale of the penalty is irrelevant: if a regulated entity is penalised for breaking the law, that should be made public. If it harms their business (which presumably is what “disproportionate” will take into account), then so be it. As my mum said so often, you should have thought of that before. Or as Voltaire might have put it: zut alors and sacré bleu!
“something that OPBAS will be on like a rat up a drainpipe” – OPBAS has no jurisdiction over HMRC. But as the rest of the post explores, HMRC’s current position seems incompatible with their legal obligations as a supervisor under the new ML Regs. Failure to comply would be a matter for Treasury.
Thank you for your comment, David, and welcome to the blog. You are quite right: it was my misunderstanding. I thought that OPBAS would oversee all the AML supervisors otherwise – frankly – what’s the point? I could sort of understand putting in place a body to oversee all the AML supervisors, but a body to oversee some of them… how is that going to ensure that they ALL supervise in the same way and to the same standards? Now I’m even more annoyed by it than I was before! But thank you for spotting the error. Best wishes from Susan
An article published today – 12 February 2018 – says that only 12% of UK estate agents understand their AML obligations: http://www.propertyindustryeye.com/just-12-of-agents-understand-anti-money-laundering-obligations/
And the article has a link to the quiz they were asked to do: https://www.surveymonkey.co.uk/r/Y8HGDKH
If I tell you that I did the quiz and got 6 out of 9 answers right, please don’t judge me… Tell me how you did, as I think the wording of some questions is a bit odd. Well, I would say that, wouldn’t I?
A property trade website reports (on 6 April 2018) that HMRC is still staying quiet on how many estate agency firms have been penalised, and to what level, for AML failings: http://www.propertyindustryeye.com/hmrc-continues-silence-on-how-many-estate-agents-have-been-fined-for-anti-money-laundering-breaches/
Pingback: Hiding their light | I hate money laundering
Pingback: The concept of anonymous publication | I hate money laundering