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Your guide to risk assessing your business for money laundering

Businesses that are regulated by money laundering legislation need to carry out a risk assessment, to identify where they could be at risk of being used for money laundering.

Andrea Warmington

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Letting agencies are now subject to money laundering legislation, under The Money Laundering and Terrorist Financing (Amendment) Regulations 2019, which came into effect on January 10, 2020.  Under the regulations, letting agencies who process agreements where, for a period of a month or more, the rent during at least part of that period is equivalent to a monthly rent of €10,000 or more, will need to meet certain responsibilities, including risk assessing their businesses to identify where they could be at risk of being used for money laundering.

Guidance from the government suggests that businesses use their risk-based approach to decide which areas of your business are at risk and where you will need to implement procedures to prevent money laundering. A risk-based approach means your business can focus its efforts and resources on the areas where the risks of money-laundering are the highest. 

Carrying out a risk assessment

It’s up to your business how you carry out your risk assessment, the scope of which will depend on the size and structure of your business, your customers, and the services that you offer. Your risk assessment should consider:

  • The types of customers you have, their behaviour, how they come into your business, and where they are based.
  • Your delivery channels and payment processes, for example if you accept cash, cheques, electronic transfers, or wire transfers.
  • Where your customers’ funds come from or go to.
  • Whether inappropriate assets could be placed in your business, or moved from or through it.
  • If you offer products or services which could allow the ownership of assets to be disguised.
  • Whether you supply any services without meeting your customers face to face.

After you’ve carried out your risk assessment

Once you’ve completed your risk assessment, you will need to:

  • Put in place policies, controls, and procedures to reduce any risks that you have identified.
  • Continue monitoring your business on an ongoing basis to make sure your controls are effective.
  • Identify and report any suspicious transactions or activities.

This article is based on the government's guidance and is intended as a guide only - it is not exhaustive and should not be considered legal advice. For more information on risk assessing your business, please refer to gov.uk.

About the author

Andrea Warmington
Content Manager
Andrea writes and edits content for Goodlord's digital channels in her role as Content Manager. She's originally from Auckland, New Zealand, and is Goodlord's biggest All Blacks fan.
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