Guidance

Understanding risks and taking action for estate agency businesses

Updated 9 September 2025

About this risk assessment

This risk assessment by HMRC is prepared and made available to you under Regulations 17 and 47 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (referred to as ‘the regulations’ throughout this guidance).

It tells you about the risks that your business might face as an estate agent business (EAB).

There is separate guidance to support EABs in complying with their obligations under the regulations.

In line with Regulations 18 and 18A of the regulations, all EABs must carry out a risk assessment to identify and assess the risks to their business of:

• money laundering
• terrorist financing
• proliferation financing

You must take this risk assessment into account when carrying out your business’s own risk assessment.

You must also read and consider other relevant documents such as:

• the national risk assessment of money laundering and terrorist financing 2025 (We strongly recommend you read the whole document as important risk information is likely to be missed if only parts of the National Risk Assessment are considered. In particular, you should read and consider section 2, 3, 4 and 5)
• the national risk assessment of proliferation financing published in 2021
• guidance produced on the Financial Action Task Force (FATF) website
• the Office of Financial Sanctions Implementation (OFSI) threat assessment for property

As an EAB you must take appropriate steps, taking into account of the size and nature of your business, to identify and assess the risks your business may be exposed to.

You must consider the following risk factors: 

• your customers
• the countries and geographical areas of your operations
• each EAB service or combination of services you provide
• the size, nature or frequency of your business transactions
• how you provide your services and interact with your customers (your delivery channels)

The steps you have taken to identify and assess these risks must be fully reflected in your business’s risk assessment and you must keep an up-to-date record in writing of these steps. You must be able to provide an up-to-date copy of your risk assessment, and the information you have used to carry out that risk assessment to HMRC when requested.

Property transactions provide a high risk of money laundering. You must take a risk-based approach to effectively manage and mitigate risks your business faces. An effective risk-based approach will require you to carry out your risk assessment in line with your business model and the listed risk factors. Your risk assessment must identify and assess any risks where your business could be exploited for money laundering, terrorist financing and proliferation financing.

This risk assessment by HMRC is intended to help you to identify and assess the risks that your business may be exposed to. When you have identified the risks that are relevant to your business, you must put in place policies, controls and procedures to effectively manage and mitigate those risks.

You must apply any additional measures as set out in the regulations, particularly where there is a high or higher risk of:

• money laundering
• terrorist financing
• proliferation financing

If you begin to provide additional or new EAB services, or if you change how your services are provided, or how your business operates, you must make sure your risk assessment reflects these changes. Your policies, controls and procedures (PCPs) must also be updated to reflect how you will effectively manage and mitigate any additional or new risks, before you start the new services or business operating model.

The risk characteristics within this risk assessment are HMRC’s assessment of risk for the EAB sector. Whilst all these risks must be taken into account in your risk assessment and PCPs, you may also find additional risks when evaluating your own business.

Risk Characteristics

The regulations define estate agents as a firm or sole practitioner which carries out estate agency work (within the meaning given by section 1 of the Estate Agents Act 1979). Since 1 October 2012, this includes EABs based in the UK who deal with overseas property. It also covers estate agents based abroad if their customer is based in the UK.

The definition of estate agency work is very broad and will cover businesses that may not consider themselves to be estate agents which is why HMRC refers to them as estate agency businesses (EABs). More details can be found in the HMRC guidance.

The services provided by EABs can be used by criminals to:

• help obscure the identity of beneficial owners
• support the channelling of illicit funds through property transactions
• help obscure the true criminal origin of illicit funds
• help criminals enjoy the proceeds of a criminal lifestyle — providing a home for the criminal, or a property for criminal use

As an EAB you must submit a Suspicious Activity Report to the National Crime Agency (NCA) as soon as possible if you know or suspect that a person is engaged in or attempting money laundering or terrorist financing.

Find out how to submit a Suspicious Activity Report on the NCA website.

Money laundering

The National Risk Assessment 2025 (NRA 2025) reports that property transactions are seen in all typologies and predicate offences for money laundering, including corruption, sanctions evasion, modern slavery and human trafficking, organised immigration crime, drugs and fraud. The money laundering risks posed by the property sector overall have been assessed by the NRA 2025 as having a higher risk of money laundering with estate agents identified as one of the property sectors with the highest risk of exposure. Use of property to facilitate money laundering is attractive to criminals at all values and locations in the UK. The NRA 2025 assesses EAB services themselves as medium risk, although this is the same as in the NRA 2020, the level of risk within the medium category is assessed to have risen slightly. 

Purchases made by corporate structures or trusts based in secrecy jurisdictions pose the greatest level of risk, due to the difficulties in determining the ultimate beneficial owners, along with the use of complex structures and arrangements to purchase property remain common, especially in the high-end and commercial property market. There has been an increasing and extensive use of Private Investment Vehicles (PIV) and Special Purpose Vehicles (SPV) to purchase property since 2020. 

Property transactions are an attractive method to launder money due to the large amounts which can be moved and the often-increasing value of property as an asset. Criminals often purchase properties as long-term investments and to release their criminal funds.

The price of property in the UK usually rises over time, presenting an opportunity for criminals to increase the value of their illicit gains. Furthermore, the property itself can be used for criminal purposes, such as serious and organised crime as it provides somewhere for the criminal to live or a base for their operations, or both. 

Criminals often buy property after using other money laundering methods. These methods can increase the distance between the property purchase and the criminal source of funds, making it seem that the money is clean. The appearance of legitimate funds could help them avoid triggering stricter enhanced due diligence checks by EABs. 

The NRA 2025 notes that the most significant risk of money laundering is through the purchase of super-prime property, with a significant number of politically exposed persons (PEPs) being involved in these transactions. 

The risks associated with residential property are higher than for commercial property. This can be because customer turnover is higher, the property is easier to sell on, and it can be lived in using criminal funds. This makes residential property subject to a higher money laundering risk than commercial properties. 

However, the commercial sector also poses risks. Complex, non-transparent company structures are less likely to raise suspicions in the commercial sector than in the residential market. Commercial property may be purchased by criminals as premises for cash-intensive businesses involved in money laundering or other crimes such as human trafficking.

Commercial property may also provide legitimate income with which to merge illicit funds.

Many EABs do not handle client money, however, their relationships with both the buyers and sellers of properties can provide crucial information to identify suspicious transactions. The NCA estimate that up to £10 billion could be laundered through the UK property market annually.

Money laundering risk indicators

The following information describes risks that your business may face as an EAB.

You must consider and take into account all of the information in this risk assessment when carrying out your business’s own risk assessment.

EAB customers include both the buyer and seller of property, and any intermediary acting on their behalf.

Residential property

There are money laundering risks for residential properties at all values. See ‘Super-prime property’ for information on higher values.

Lower or mid value properties still represent an attractive investment for criminal funds although they cannot be used to launder the same volumes as Super-prime properties. Lower value residential properties can also be purchased to commit further criminal offences.

The main risks for residential property stem from the source of funds used and whether the customer profile matches the property purchased or sold.

For example, a customer with a low level of income purchasing a property that is not in line with that level of income would be high risk.

Commercial property

Commercial property of any value can be used for money laundering purposes. This ranges from high street shops to properties used as factories, office blocks and hotels. The value of property varies throughout the UK, with the highest value properties typically concentrated in London. See ‘the customer operates a cash-intensive businesses’ for more information.

Some characteristics of high-end commercial property limit its use to certain types of criminals. However, for criminals looking to profit from their criminality over a longer period of time, investing in high-end commercial property offers higher dividends than residential or lower-end commercial property. Complex, non-transparent company structures are also less likely to raise suspicions in the commercial sector than in the residential market. The use of unit and investment trusts, Real Estate Investment Trusts (REIT) and Open-Ended Investment Companies (OEIC) are common vehicles to invest in commercial property. See ‘the customer is a Real Estate Investment Trust (REIT) or Open-Ended Investment Company (OEIC)’ for more information.

Identified examples of money laundering through high-end commercial real estate have included the use of professional services and criminals financing property purchases with bridging loans. These are then replaced by mortgages from UK financial institutions (bridging finance is a short-term loan used to bridge the gap between money going out and money coming in). Criminals have set up bridging loan companies to launder their funds, issuing their criminal capital as bridging loans which are then repaid as legitimate investments. Bridging finance is characterised by speed and flexibility, making it a popular choice for property transactions. However, the rapid nature of these transactions also makes bridging finance susceptible to money laundering risks. EABs should consider whether the use of bridging finance constitutes a higher risk.

Lower value commercial properties are more frequently exploited by UK-based organised crime groups associated with drugs, waste crime, and modern slavery and human trafficking. These premises can be purchased to be used as a base for cash-based money laundering or used to commit further criminal offences. Large scale cannabis cultivation using commercial premises is increasing in the UK.

Super-prime property

Super-prime properties are attractive to criminal actors as a stable asset to store value without depreciating in the medium-long term or for the prestige and high living standards associated with criminal lifestyle. HMRC generally considers super-prime properties to be £5 million or over in London and the Southeast, and £1 million or over elsewhere in the UK.

High-value property is frequently identified in relation to overseas predicate money laundering and fraud offences, with examples including the proceeds of corruption, and fraud in Eurasia (Russia, Belarus, Kazakhstan, Kyrgyzstan, Ukraine, Tajikistan, Turkmenistan, Uzbekistan, and part of the Caucasus (including Azerbaijan, Georgia and Armenia)), Angola, Ghana, Nigeria, China and Pakistan.

As such, any super-prime transactions should be treated as high-risk.

Super-prime properties are frequently purchased using complex structures to distance the purchase from the criminal origin of the funds.

Customer’s profile and behaviour

Where the profile of the customer is not in line with the property transaction, for example, where the purchase price appears to exceed the customer’s means, this may indicate a risk with the source of funds being used to fund the transaction. 

Additionally, where there appears to be a link between the customers (buyer and seller) for which no credible explanation is given, this may indicate an increased risk. 

You should carefully consider the nature of the business relationship with your customer, the risks associated with the customer and their proposed transactions. For example, where the type or size of the property or location of the property suggests that another EAB would have been better placed to act, you should consider carefully why the customer chose your business. For example, use of an EAB in the super-prime market being asked to sell a property of a significantly lower value.

Illogical patterns may indicate efforts to lower the risk of detection (if the same customer is selling other properties through another EAB more local to them but does not want the scale of their activity known or collusion between agents and the beneficial owner or owners of the property).

There is an increased level of risk where the customer is secretive or evasive about any aspect of a property transaction, such as, but not limited to:

• explaining the purpose of a transaction
• is reluctant to provide customer due diligence (CDD) documents
• not providing information about source of funds or wealth when requested
• not allowing viewings when selling or requiring viewings when purchasing
• is reluctant to engage with professional services (solicitors or surveyors)
• is reluctant to explain how the purchase is being funded, and the property value is not within their known means of affordability

Checking for adverse media on customers may show convictions or arrests for criminal activity, including money laundering.

Politically exposed persons (PEPs)

PEPs are individuals who have been entrusted with a prominent public function and their close relatives and associates. They face a heightened risk of being targeted by those seeking to exploit their positions, for the purposes of laundering illicit funds, or committing predicate offences such as bribery or other corruption related offending.

If you deal with a PEP, then you are required to conduct enhanced due diligence. EABs should be particularly vigilant when dealing with PEPs from a jurisdiction with high levels of corruption, money laundering or terrorist financing risks. PEPs may be the beneficial owners of property or may use complex corporate structures to hide their beneficial ownership of a property.

The term PEP can apply to both UK and foreign nationals. Under UK law the starting point for EABs should be to treat domestic (UK) PEPs, their family members and close associates as inherently lower risk than non-domestic PEPs. They should apply a lower level of enhanced due diligence to domestic PEPs unless other risk factors are present. Non-domestic PEPs must be treated as high-risk.

Super-prime property in particular is exposed to high levels of interest by PEPs. 

Multiple property transactions

Multiple transactions of the same property in a short period of time, possibly with unexplained changes in value, may indicate the repeated use of a single property to launder large sums of money. This may be through successive transactions and efforts to obscure the identity of beneficial owners through repeated changes of ownership.

Similarly, a single customer purchasing or selling multiple properties at the same time may indicate the customer is attempting to launder multiple funds through different transactions.

Where a customer has multiple properties for sale and uses multiple lawyers or financial institutions indicates higher risk. It would normally be seen that a customer involved with buying or selling multiple properties would use the same solicitor and or financial institutions. Where multiple intermediaries are involved for the same customer activity or transaction, it may be that they are using multiple intermediaries to conceal the full scale of their activity.

The property price is not reflective of market value

Requests that the asking price is unreasonably higher or lower than the valuation suggests, or sales at prices which are significantly above or below market price, present a significantly higher risk, as they do not make economic sense.

For example, a purchaser may have organised to pay above the odds for the property. The funds to be used could be the proceeds of crime, with the transaction providing an apparent legitimate source for those funds. You must clearly understand the reasons for your customer requesting an unusual sale price, or paying above market value, to mitigate the risk. A Suspicious Activity Report on the NCA website should be filed as appropriate.

The customer is part of a complex or unusual corporate structure

A complex corporate structure refers to a firm or network of firms, where there is no immediate transparency of its ultimate ownership or control. For example, there could be several layers of indirect ownership, subsidiaries and divisions.

It also may have multiple shareholders, corporate officers or persons with significant control.

Customers involved in property transactions that are part of an unusual or unnecessarily complex corporate structure may be a sign of an increased level of risk.

This could be a sign of attempts to make it more difficult for funds being channelled through the corporate structure to be traced, or for the ultimate beneficial owners of the business to be identified.

Tracing ownership and control is more difficult where corporate structures are complex or unusual. This is particularly the case where a corporate structure extends overseas or appears to be a shell company.

The transaction involves a legal entity that is not transparent

This can be a sign of an attempt to obscure beneficial ownership.

In the UK, companies must register beneficial ownership information with Companies House. An overseas entity must register any land or property it holds in the UK on the Register of Overseas Entities. Land registry checks can also be used to verify who the beneficial owner is.

Overseas jurisdictions may not have similar requirements, making them more attractive to those seeking entities where the identity of beneficial owners or origin of illicit funds it holds or moves may be more easily obscured.

Private Investment Vehicles (PIV) and Special Purpose Vehicles (SPV) can be used in property transactions to obscure beneficial ownership. These should be treated as higher risk.

If your customer seeking to buy a property is a corporate vehicle and you cannot identify the beneficial owner, you should not proceed with the transaction.

Customers that have a corporate structure not wholly based within the UK

EABs may deal with customers that have a corporate structure partially based in an overseas jurisdiction or based across multiple overseas jurisdictions.

Tracing ownership and control is more difficult where corporate structures are not wholly based within the UK. As such, transactions involving corporate structures not wholly based within the UK should be treated as higher risk.

Basing a corporate structure in an overseas jurisdiction may indicate attempts to avoid the levels of corporate transparency that would be typical for a structure based wholly in the UK, such as scrutiny of a business’s activity, ownership and financial arrangements across its corporate structure.

This could indicate that the business is attempting to make it more difficult for funds being channelled through the corporate structure to be traced, or for the ultimate beneficial owners of the business to be identified.

In particular, the risk is high where the corporate structure will be wholly or partially based in a High Risk Third Country (HRTC). Therefore, all transactions involving a corporate structure with a presence in a HRTC (see ‘the customer is from or linked to a High Risk Third Country’), or an overseas jurisdiction mentioned in ‘the customer is from or linked to an overseas jurisdiction’, should be treated as high risk.  

The customer is from or linked to a High Risk Third Country

High Risk Third Countries (HRTCs) are jurisdictions considered by the FATF to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, or proliferation financing.

HRTCs are included in the following publications and are subject to change:

• High-Risk Jurisdictions subject to a Call for Action (black list) on the FATF website
• Jurisdictions under Increased Monitoring (grey list) on the FATF website

Find out more information about High Risk Third Countries.

Services provided to or from HRTCs or customers, intermediaries and third parties who are resident, have their principal place of business, or are incorporated in HRTCs pose a high risk of money laundering, terrorist financing and proliferation financing.

You must apply enhanced due diligence measures before you form a business relationship with a person established in a HRTC.

As the FATF lists are subject to change, there is a risk that that customers you have an existing business relationship with are established in a jurisdiction which may become a HRTC during the business relationship. You should factor this into your ongoing monitoring, alongside other considerations, like changes in country risk profiles, changes to sanctions and embargoes.

The customer is from or linked to an overseas jurisdiction

Services provided to or from overseas jurisdictions or customers, intermediaries and third parties who are resident, have their principal place of business, or are incorporated overseas may pose an increased risk of money laundering, terrorist financing or proliferation financing.

In determining the appropriate CDD or enhanced due diligence measures to take where there is a link to an overseas jurisdiction in a business relationship, you must consider your business’s risk assessment, as well as your assessment of the level of risk arising in that particular case.

Your assessment of the level of risk arising in a particular case must include consideration of the following geographical risk factors in Regulation 33(6)(c) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The following can indicate, where identified by a credible source, that an overseas jurisdiction poses an increased level of risk:

• not having effective systems to counter money laundering or terrorist financing
• having a significant level of corruption, terrorism, or supply of illicit drugs
• subject to sanctions or embargoes issued by the UK, EU or UN
• providing funding or support for terrorism
• having organisations designated under domestic sanctions legislation or if they are proscribed terrorist groups or organisations by the UK
• having terrorist organisations designated by the UK, EU, other countries and international organisations
• countries that have been assessed by organisations such as FATF, FATF-style regional bodies, World Bank, Organisation for Economic Co-operation and Development and the International Monetary Fund as not implementing measures to counter money laundering and terrorist financing that are consistent with the FATF recommendations

In addition to the geographical risk factors in Regulation 33(6)(c), HMRC considers there may be an increased geographical risk where the overseas jurisdiction:

• is not subject to anti money laundering or counter terrorist measures equivalent to the UK
• shares a border with a HRTC as money laundering, terrorist financing or proliferation financing often involves the movement of funds across borders
• has limited corporate registration requirements or limited beneficial ownership information requirements (for example, where there is no requirement to update ownership changes)
• allows unrestricted bearer share usage
• has laws aiding financial secrecy
• has high levels of tax evasion
• has high levels of capital flight
• is a conflict zone

Examples of sources which may help you to consider the risk of an overseas jurisdiction may include:

• guidance on the Joint Money Laundering Steering Group website, for example, Annex 4-1 of part 1, on the level of risk in other jurisdictions
• guidance and corruption index on the Transparency International website
• guidance on the Global Witness website
• internet searches
• news articles and media publications

You should take care to make sure the sources you consider are credible.

Where you consider there is a high risk in a particular case, you must apply enhanced due diligence measures before you form a business relationship.

If an overseas jurisdiction is also a HRTC, you must apply enhanced due diligence measures before you form a business relationship.

All persons and entities listed or linked to the UK sanctions list, irrespective of which sanctions regime, should be treated as high-risk.

Whilst you must make your own assessment of all jurisdictions based on the factors already mentioned, HMRC considers the countries listed within the National Risk Assessment 2025 and the OFSI Property Threat Assessment to be higher risk.

Transactions involving an intermediary

Intermediaries can pose a risk within EAB transactions, by placing distance between the customer and the EAB, which could be used for the purposes of providing anonymity.

Signs of an increased level of risk are:

• intermediaries based in overseas jurisdictions
• intermediaries who market themselves and their jurisdictions as facilitating anonymity and disguised asset ownership
• requests from intermediaries to provide services to their customers that can be used as part of a scheme to disguise income, assets, and ownership
• the number of intermediaries in a transaction seems excessive
• lack of clear rationale to explain why the customer has not approached you directly for the service

Transactions with no face-to-face interaction

Where you meet your customer face-to-face and you are able to review original physical documents before providing services, this can give you greater assurance that the customer is who they say they are.

Where you provide services without meeting your customer face-to-face, this presents a risk that the customer is not who they say they are.

Fraudulent identity or business documents may be provided and may be more difficult to detect when supplied online or remotely.

Where you have regular, face-to-face contact with a customer, this presents a reduced level of risk than where you meet a customer face-to-face initially but there is no ongoing in-person interaction.

Whilst you may have assured yourself of the customer’s identity at the outset of the business relationship, there is a risk that the customer is employed to act for a criminal operation only to obtain the service without arousing suspicion. There is a risk that the ongoing business relationship is with an organised crime group, and this may not be detected where there is no further face-to-face interaction.

The CDD measures you take where there is little or no face-to-face contact must reflect the additional risk.

Transactions with an individual or organisation which could be a professional enabler

Whilst most businesses offering professional services take action to comply with professional and regulatory obligations, such as those under the regulations, some have been known to facilitate economic crime and other criminal offences, for example fraud, and drive serious and organised crime in the UK.

They may also enable criminality through negligence of their own compliance with professional and regulatory obligations. This is group is known collectively as professional enablers.

Professional services include but are not limited to:

• accountancy services
• financial services
• trust or company services
• legal services
• other estate agency businesses
• letting agent businesses
• art market participants

You are providing professional services if you are carrying out relevant activity as an EAB.

There is a risk that you may deal with these ‘professional enablers’ through the course of your business and may be at an increased risk of exposure to money laundering, terrorist financing or proliferation financing risks when dealing with them. They may deliberately seek to exploit your services or any weaknesses in your professional and regulatory compliance procedures, to enable criminality. They may also expose you to these risks through neglect of their own compliance.

You should not assume that all professional service providers will take the same approach to their regulatory and professional obligations. Professional enablers are known to be highly adaptable and are likely to have an understanding of your regulatory obligations. They may seek to exploit your trust that your peers in professional service sectors are meeting their own regulatory and professional obligations and are unlikely to be enabling criminality.

It can be difficult to identify professional enablers, but you can be vigilant to risks associated with their behaviours.

Signs of an increased level of risk are individuals or organisations who:

• undertake relevant activity under the regulations but do not appear to be anti money laundering supervised
• in relation to their regulatory or professional obligations (including but not limited to the Money Laundering Regulations 2017):
  • appear to take shortcuts or attempt to circumvent compliance procedures
  • exhibit dishonest, improper or reckless behaviour
  • appear negligent

Risks relating to providing multiple services

Purchases of property where the property is then subsequently let out can lead to additional risks, especially if it was not apparent at the start of the transaction that the property was intended to be let. EABs should consider the purpose of the original transaction and determine if there are any factors that increase the risk of money laundering.

A property transaction with no commercial purpose

If there is no obvious commercial purpose for a property transaction, this is a sign of an increased level of risk.

This may include, for example, where a dormant, or non-trading business wants to sell or purchase property.

Payment and source of funds risks

Indications of higher risk can include where a customer:

• changes their bank account during a transaction
• has a bank account based abroad or in a secrecy jurisdiction
• pays in cash or uses foreign currencies

This also includes if a customer makes an unexpected or unrequested payment, over payment, or splits payments, particularly if a refund is then requested, as refunds can help disguise the origin of illicit funds.

Where the pattern of a transaction inexplicably changes, progresses at an unusual speed, when the customer changes or unknown parties are introduced at a late stage of transactions, or when there are unexplained changes in financial arrangements all indicate or create a higher risk.

Unusual sources of funds, for example, use of complex loans, mortgages from an unknown or overseas bank, bridging loans (see ‘commercial property’) or other obscure means of finance also indicate higher risks.

Where a customer makes payments from a bank account not associated with them, it could mean that a third party, apparently unconnected with your customer, is bearing the transaction costs. This could be a way of disguising who the beneficial owner is. Likewise, unusual involvement of third parties, cash gifts, or large payments from private funds and high-risk countries, increases the money laundering and terrorist financing risk.

Requests to act for multiple companies which are connected or have common beneficial owners

Requests to facilitate a property transaction for more than one firm, which share either a common beneficial owner or a common group of beneficial owners, can be a sign of attempts to obscure relationships between firms they own.

The customer is based in, or operates from, a virtual office

Virtual office addresses not connected to the customer or beneficial owners can facilitate anonymity. This anonymity is attractive to criminals looking to distance the criminal origin of funds. Where a customer is trading from a virtual office, especially in virtual offices based overseas, the risk of the customer facilitating money laundering, terrorist financing or proliferation financing may be increased.

The customer is a trust

The misuse of trusts for money laundering is a global problem. They are rarely used in isolation, but as part of complex structures layered with corporate structures.

Trusts are often used as the last step in the money laundering process after other laundering methods have been used to disguise the origin of funds. Trusts can provide the appearance of distance between the settlor and the assets, when in reality the settlor may maintain a level of control over the assets.

It is highly likely that criminals favour overseas trusts for money laundering in the UK. Trusts from the British Virgin Islands, Gibraltar, Guernsey, and Jersey have been identified frequently in UK law enforcement investigations, with trusts from USA, Liechtenstein, and Luxembourg less frequently appearing.

Therefore, any property transaction involving a trust should be treated as higher risk.

The customer is a Real Estate Investment Trust (REIT) or Open-Ended Investment Company (OEIC)

A REIT is a vehicle that allows an investor to obtain broadly similar returns from their investment as they would have had they invested directly in property. The REIT is a limited company, or group of companies, that elects into the REIT regime. The REIT is required to invest mainly in property and to pay out 90% of the profits from its property rental business as measured for tax purposes as dividends to shareholders. The REIT is exempt from UK tax on the income and gains of its property rental business.

An OEIC is a collective investment scheme that is structured as a company with variable capital and satisfies the property and investment condition in section 236 Financial Services Management Act 2000. Once authorised by the Financial Conduct Authority (FCA), it is incorporated as a company under The Open-Ended Investment Companies Regulations 2001.

Whilst these vehicles are subject to regulatory oversight by the FCA, there is less transparency in property investment than outright ownership. Investment into high-end commercial property is often found at the end of the money laundering process, where funds have been laundered through several jurisdictions before reaching the UK.

Customers that are a REIT or OEIC must be treated as higher risk.

The customer operates a cash-intensive business

Cash-intensive businesses can be attractive tools for criminals to launder illicit cash through, presenting it as legitimate funds.

When facilitating property transactions involving customers with cash-intensive operations, there is a risk the sale or purchase may involve illicit funds, which may assist in hiding their origin. You must consider establishing the source of funds for the transaction is consistent with your knowledge of the customer, the customer’s business and risk profile.

Where the volume of cash transacted through the customer’s business is not consistent with what you know about your customers business activity or does not make commercial sense, this poses an increased level of risk and may indicate an attempt to launder illicit funds.

The following types of cash-intensive businesses have been known to launder money:

• vape shops
• hairdressers or barbers
• car washes
• tanning salons, nail bars and beauty parlours
• American candy shops

Property transactions involving individuals connected to, or involved in, cash-intensive businesses should be treated as higher risk.

Joint Ventures and Reliance Agreements

Working with another EAB as a joint venture, or to market the same property can bring about additional risks. See ‘transactions with an individual or organisation which could be a professional enabler’ for more information on professional enablers. As such, care should be taken with any reliance agreement for the use of CDD documents.

Payments for EAB services

Cash is attractive to criminals as it provides anonymity and disguises audit trails. It is more difficult to trace the origin of funds where cash is used to pay for EAB services you provide.

Although EAB services may rarely be paid for in cash, the payment of cash directly into your business bank account from unknown sources can pose an increased risk of money laundering. Monitoring cash payments for services into your bank account to ensure they are from customers who you have authorised to make cash payments can help you to identify payments from unknown sources.

Similarly, you must ensure that the customer you have verified is the one making the payment for your services. Payments from third parties, in cash or otherwise, who are not linked to the property transaction raise a red flag and should be treated as high risk and suspicious.

Property auctions

Auctions can be quicker than a standard property transaction, which in conjunction with other risk factors, such as the use of intermediary agents, can be attractive to criminals.

Use of third-party identity providers or compliance companies

There are many third-party identity providers and compliance companies that operate with the property market to undertake CDD checks and provide other services, such as creating risk assessments on behalf of EABs. Use of a third-party can offer additional risks.

The level of service, and standard of the product and service provided will depend on which third-party you use, and which level of service you pay for. Some will conduct basic background checks, whereas others may only check against sanction lists. Most will provide a report, which could show a colour risk score or ticks and crosses.

It is important to note that you, as the EAB, are responsible ensuring you comply with all of your obligations under the regulations. Any service, product or report the third-party provides must be examined by you, and you need to decide what, if any, further action you need to take to ensure you meet your obligations under the regulations.

Care must be undertaken when using third parties, as any breach of the regulations may result in sanctions, including financial penalties or criminal charges, on you or your business, as the supervised entity, rather than the third-party.

Terrorist financing

EABs are assessed by the NRA 2025 as low risk for use for terrorist financing purposes. However, the sector remains more attractive for money laundering which could translate to vulnerability to terrorist financing in the future. It is important for EABs to continue to put in place strong controls for preventing terrorist financing.

Terrorist financing risk indicators

The terrorist financing risk indicators set out in this risk assessment must be considered higher risk but should be read and assessed in conjunction with the other risk indicators in this guidance.

Customer links to proscribed organisations

Under the Terrorism Act 2000, the Home Secretary may proscribe an organisation if they believe it is concerned in terrorism, and it is proportionate to do. For the purposes of the Act, this means that the organisation:

• commits or participates in acts of terrorism
• prepares for terrorism
• promotes or encourages terrorism (including the unlawful glorification of terrorism)
• is otherwise concerned in terrorism

Any transaction involving proscribed organisations, or individuals or businesses linked to them, should:

• be treated as high risk
• not be continued

A Suspicious Activity Report on the NCA website should be filed as appropriate.

If you carry out business with a customer linked to a proscribed organisation you may be committing a criminal offence. Failing to report suspicious activity linked to terrorist financing is also a criminal offence.

The Home Office publishes a list of all proscribed terrorist groups and organisations.

Customers sanctioned by the UK for terrorist activity

There is a risk of terrorist financing in any property transaction linked to a regime sanctioned for terrorism, including any:

• sanctioned entity
• government
• government owned entities
• PEPs

Furthermore, there are risks that any customer may be receiving proceeds from a company operating in a high-risk area and paying protection money to a terrorist group to operate in the area or is paying a supplier connected to a terrorist group.

You should therefore risk assess your clients carefully.

Any transactions falling into the categories should be treated as high risk.

Offshore ownership, intermediary jurisdictions and countries with a high geographical risk of terrorism

For more information, see:

• ‘the customer is from or linked to a High Risk Third Country’
• ‘the customer is from or linked to an overseas jurisdiction’
• ‘customer links to proscribed organisations’

Business customers who are established, or linked to businesses with an offshore presence, in a country with a high geographical risk of terrorism should be treated as higher risk.

Some intermediary jurisdictions have historically offered greater privacy through their legal and financial systems, as well as different tax regimes to the UK. These can be popular and exploited for the purpose of financing terrorism.

Customers linked to countries with a high geographical risk of terrorism should be treated as higher risk.

Proliferation financing

Proliferation financing is defined as providing funds or financial services for use in the manufacture, acquisition, development, transfer and shipment of chemical, biological, radiological or nuclear weapons (also known as weapons of mass destruction) and their delivery systems. The measures exist to prevent the build-up of weapons of mass destruction by certain regimes.

The UK proliferation financing sanctions regime highlights designated people and businesses sanctions for proliferation financing purposes. It includes specific sanctions against chemical and nuclear weapons.

Current sanctioned businesses, individuals and countries include:

• Iran
• North Korea
• Russia
• Syria

The UK proliferation financing sanctions are regularly updated, so it is important to be aware of any changes and additions by checking the UK sanction list.

Proliferation financing risk indicators

The proliferation financing risk indicators set out in this risk assessment should be considered higher risk but should be read and assessed in conjunction with the other risk indicators in this guidance.

Customers linked to the governments of proliferation financing sanctioned regimes

There is a risk of proliferation financing in any property transaction linked to a regime sanctioned for proliferation financing, including any:

• sanctioned individual
• entity
• government
• government owned entities
• PEPs

These transactions should be treated as high risk.

Property being used to manufacture dual use goods

There is a risk of commercial property being utilised for the manufacturing of dual use items, such as:

• heavy machinery
• carbon fibre
• vacuum pumps
• specialist materials like high-grade steel and aluminium
• specialist equipment like high-speed cameras
• mass spectrometers
• electronic components and chemicals (see the national risk assessment of proliferation financing for more information on dual use items)

As such, any business or individual involved in a commercial property transaction for a manufacturing premises linked to dual use items would be higher risk, especially where the business or individual is also linked to regimes sanctioned for proliferation financing.

Use of obscure company structures, trusts and intermediary jurisdictions would also indicate a higher risk in a commercial property transaction for a manufacturing premises.