Changes to Money Laundering & Terrorist Financing Regulations will affect procedures adopted for future farm and land transactions.
Spring is the traditional trigger for the farm and land market to kick into action.
But farmers and landowners are now being reminded that the changes in regulations will be "much more onerous".
The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 introduced a number of changes including the new obligation for agents to check the identity of any prospective buyer of a property, not just the vendor as client.
“This will be much more onerous as in the past we as agents were required solely to ask for details from clients selling a property but now we must do the same for potential buyers of property,” explained Eifion Bibby, a land agent with Davis Meade Property Consultants.
“The Regulations state that buying agents and those advising clients on the purchase of property will have to carry out due diligence checks on their clients and on sellers; while those acting for sellers will have to carry out checks on buyers as well as on their own clients,” he said.
Identity
The due diligence means establishing and verifying the identity of the customer, including any beneficial owners and any person acting on behalf of the customer, partners or family members in the business.
The process will also need to establish whether someone is a Politically Exposed Person; where the funds are coming from and whether there are any other suspicious elements to the transaction.
“Where land is sold by private treaty the new regulations mean that we will have to ask to see the passport or alternative means of identity and address of anyone making an offer before we can accept the offer and also ask where the funding is coming from or if they are politically exposed,” Mr Bibby explained
“Where a loan is being offered by a family member, it may be necessary to carry out due diligence checks on that person. We may also need to check if a bank loan has actually been approved not just offered.
“At an auction, HMRC’s interim guidance specifies that potential bidders have to register and provide proof of identity in advance and for formal tenders we have to carry our due diligence checks prior to sealed offers being considered,” he said.
Under the regulations, all owners, officers, managers of estate agency businesses and all sole practitioners acting as estate agents must have applied to HMRC for approval by June 26, 2018. Failure to comply will be a criminal offence.
