The new AML/CTF rules are now in effect, with agencies warned that treating compliance as a one-off could leave them exposed as scrutiny increases.
With agencies facing thousands of dollars in fines for failing to comply with the latest anti-money laundering and combating the financing of terrorism (AML/CTF) reforms, principals have been reminded that the new compliance is more than just a box to tick.
According to Visibl founder Kaan Yuksel, with the dust settling around the new Tranche 2 AML/CTF reforms, real estate businesses had begun to find their feet in the space.
“The businesses that have put their best foot forward are finding that it is not the big scary monster that it once looked like,” Yuksel said.
He said agencies that got ahead of the reforms, understanding what was required and began implementing training early, were now best placed to meet the new requirements.
By contrast, those that ignored the 1 July deadline found themselves scrambling to put the right systems and processes in place once the reforms took effect.
Yuksel said that agencies needed to ensure that they were compliant in practice, rather than just adhering to the reforms on paper.
“They haven’t really gone the extra step of implementing it and operationalising it in their business.”
“They’ve just left a document on the shelf and said ‘yep, we have done that’, and they’ve moved forward.”
Compliance is an ongoing learning process
He said that by incorporating compliance work into the regular workflow, agencies could ensure staff understood their additional duties, such as triggering know your customer (KYC) and know your business (KYB) checks or escalating red flags.
While agencies may have appointed AML compliance providers to ensure they met the required standards, Yuksel said incorporating the measures into their workflows would avoid further risks.
“I think the best way to really build your expertise is to, with whatever training provider you have, make sure you’re doing all of the training. Don’t just do the bare minimum; actually engage with it and try to understand the purpose.”
“The businesses that have done it well have not sought to train their staff as a one-off; they are constantly engaging.”
He said it was important that staff felt comfortable reaching out and engaging with a compliance officer when they had questions or were unsure.
Additionally, Yuksel said that agents who understood that making mistakes was part of the learning process would engage better with the new compliance.
Implementing good compliance strategy
Yuksel said the key to implementing strong compliance was to apply the measures consistently across the whole organisation
“Don’t fragment processes from each other. Don’t think that your sales process is separate from your compliance process and that general training is different from your AML training.”
“Don’t section it off as something that has to get done here and there; you’ve got to really implement it.”
He said that operationalising compliance could be as simple as sending the KYC check at the same time as a listing agreement, rather than requiring an entirely separate action.
Additionally, he said that it should be part of regular board or committee meetings to ensure the requirements were being met.
“Keep it in the front of your mind. Create routine and create discipline around it, and 99 per cent of the time you are going to be fine.”
Conversely, he said that agencies with poor compliance processes risked losing business, in addition to the fines that would be imposed if they were caught out.
If businesses had been managing their own AML/CTF compliance and found the burden too much, Yuksel said it was never too late to appoint a provider.
“You’re only a month and a bit into the regime, so go and find a provider that can onboard you quickly and that can get you started.”
“For those smaller operators, I really don’t see any other way for them.”
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