EU update – August 2020

Online Real estate agent fined for breaching UK AML regulations

Purplebricks were fined £266,793 by HMRC for breaching UK anti-money laundering rules. This can only shine a brighter light on the real estate sector as a whole, high street and online alike.
The description of these breaches was stated by HMRC as “failures in carrying out risk assessments; having the correct policies, controls and procedures; and conducting due diligence”. This is the same description given to 9 of the 15 firms listed.

HMRC spokesperson said “Money laundering funds serious and organized crime and costs the U.K. economy billions of pounds every year.” “We’re here to support businesses in protecting themselves from criminals who would prey on their services. That also means taking action against the minority who fail to meet their legal obligations under the regulations and in doing so invite abuse.”

The EUs top court has fined Ireland €2 million for 5AMLD delays

The European Union’s top court has fined Ireland for delays and incomplete application of the EU’s rules against money laundering and terrorist financing.

The EU Court of Justice ordered Ireland to pay to the European Commission a lump sum of €2 million, while Romania was fined €3m.

The court said “Both member states failed to transpose in full, within the period prescribed, the directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing,” the court said, referring to anti-money laundering rules adopted by the EU in 2015.

Those rules reinforced surveillance requirements for banks, lawyers and accountants and mandated more transparency on company owners.

Germany recorded almost 50% increase in AML cases in just 12 months

Germany’s federal anti-money laundering unit registered a record 114,914 suspected cases of money laundering and financing of terrorism in 2019.  

That amounts to a jump of almost 50% compared to the previous year when just over 77,000 cases were reported.

According to an advance copy of the Financial Intelligence Unit’s (FIU) 2019 annual report, the bulk of those cases were flagged by German banks and other financial institutions, as well as notaries and real estate agents.

The cases were linked to a total of 355,000 suspicious transactions.

Partner at London Law Firm suspended and fined for ignoring AML regulations

I have previously highlighted that the Solicitors Regulation Authority (SRA) were ramping up the number of AML reviews of firm in the UK. Whilst we hope not to see what appears to be total disregard for AML regulations as in the case below, perhaps we will see a sense of priority or even urgency in ensuring policies and assessments are prepared and robust

Following an investigation by the SRA and a subsequent tribunal by the SDT, Natalia Levinzon, a partner in a law firm has been suspended over multiple AML failures.

The majority of her clients were from Russia and the Ukraine, and yet there was no AML Policy or risk assessment in place of the firm or of client matters because they “knew 99% of their clients who were family or friends”.

Natalia Levinzon did not identify a client as a PEP for money laundering purposes, even though he had recently been a member of his country’s parliament.  Transactions handled by Ms Levinzon included the sale and transfer of company shares and the purchase of eight properties.

The regulator said that not only was the “client demographic” for her files predominantly Russia and the Ukraine, but the funds used to buy properties came from companies based in Dubai, the British Virgin Islands, St Kitts and Nevis, and Cyprus.

The tribunal ordered that Levinzon be suspended for nine months and pay costs of £10,000.

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