AML Non Compliance

Mass AML Non-Compliance as Upgraded AML Rules for Foreign Companies Come Into Play

2 February, 2023 | Marc Shoffman

Massive AML non-compliance was witnessed in the UK’s real estate industry as companies failed to declare their UBOs.

New AML rules for overseas land owners in the UK

The AML (Anti-money Laundering) rules were updated in the UK for foreign land owners in January 2023. The foreign real-estate firms were required to declare their UBOs (Ultimate Beneficial Owners) and update them on the ‘Overseas Entities Register’ by 31st January 2023.

News Findings

Estimated Statistics of AML compliance and AML non-compliance after the deadline are as follows:

  • The registered overseas organizations' statistics show that 19510 out of 32440 have declared their UBOs.
  • Likewise, 60% of registered overseas organizations are found to be compliant with new rules.
  • 40% of the foreign registered organizations have failed to show AML compliance due to the non-declaring of UBOs.

Furthermore, these statistics are of the foreign land-owning companies operating in the UK. Yet, the non-compliance of these companies is a rising concern to the regulatory bodies in the UK. Actually, the authorities are more concerned about KYC and AML compliance than ever before.

Further Information

Now, February has started, and thousands of companies are found non-compliant with new AML rules. These foreign companies own massive lands on the UK’s soil and have not registered their UBOs. So, the Company House might face serious fines and sanctions. Overall, the government of the UK is determined to impose sanctions and heavy fines on such firms. This registration was a strategy against the Russian invasion of Ukraine and to protect the Country from Putin’s regime.

The Register

Eventually, the register exposed many criminals using overseas companies for money laundering. Recently, Dr. Ruja Ignatova, also known as ‘Cryptoqueen,’ has appeared on the news again. Knowingly, She is on the FBI’s most-wanted list and is now declared as the UBO of two entities in Guernsey.

Lord Callanan’s statement

Business Minister Lord Callanan responded to the issue and said, “Now criminals cannot hide anywhere. The same goes for the corrupt elite, as we will use all tools to eliminate the crime. We shall put a heavy crackdown through exercising all resources to the maximum on foreign non-compliant companies. Automatically, unregistered firms and UBOs shall be rejected through the implementation of new AML rules. HM Land Registry shall carry out the rejection procedure for not letting any criminal own the UK’s land. Similarly, UK buyers face difficulties in transferring ownership of properties purchased from non-compliant organizations. Hence, it will make it more challenging to sell properties. Finally, the situation arises as criminals use these opaque corporate structures to invest in assets like real estate. Moreover, they use their illegal funds to do so."

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