Client due diligence platform Thirdfort has advised letting agents to adopt proactive measures and leverage automated screening tools ahead of new rules on sanctions reporting kicking in on the 14th of May this year.
Letting agencies will now be classified as 'Relevant Firms’, meaning they must notify the Office for Sanctions Implementation (OFSI) if they know or suspect a breach of sanctions has occurred, if a person is a designated person if it holds frozen assets, and if that knowledge or suspicion arose during the business.
Ahead of the new framework's introduction, industry body Property Mark has warned that letting agents must understand the regulations and adapt their working practices and systems accordingly. Failure to comply may result in substantial fines or even criminal prosecution.
To prepare, Thirdfort advises letting agents review OFSI guidance, refine onboarding and monitoring processes, establish clear internal reporting procedures, and provide staff with comprehensive training on sanctions compliance. Implementing strong screening processes for tenants and landlords, staying up to date with sanctions lists, and keeping detailed records will help ensure compliance.
Red flags to consider include clients exhibiting aggressive behaviour, unexplained name changes, the involvement of third parties, or individuals whose details match those on the OFSI consolidated list.
“The sanctions regime operates under strict liability, meaning that a person or business will be held liable even if they had no knowledge or reasonable cause to suspect that they were in breach of sanctions," says Harriet Holmes, Senior Manager of AML Solutions at Thirdfort.
However, she adds, "Adopting proactive measures and leveraging automated screening tools can help simplify compliance. By enhancing their due diligence, agents can protect their businesses and help to support the UK's efforts to maintain national security and financial integrity.”
