Money Laundering Checks - Deposit money received few years back in 2019

guysl80

Dear all,

 We were supposed to move to a new build property back in late 2019 but due to buidling completion delays and the pandemic it got delayed ntil now. 
Received a Mortgage offer from a lender but it got expired due these delays. As far as i remember the bank did a money laundering check and we got the results next day and on the same day the mortgage was offered.

The money we received to use as a Deposit from outside EU from my father-in-law. Ever since since we received that money it was in the same bank account since 2019 upto now. This is the same money we are going to use as the depsoit for the property. Luckly we are using the same broker so they knows the history. But this time Mortgage in Principle was optained from a different lender.

Will they be strict as earlier when we tried to obtain a mortgage  regarding the origin of the money? The solicitor says it need some documentation to perform the money laundering check. If the money is in the same account for 2+ years will they still need to do these checks? We have the bank statements since 2019 to prove that money is in the account and not touched.
Thanks in advance

Slithery

There isn't a fixed time limit. It's up to each individual conveyancer what evidence they require to reassure themselves that the funds are OK.

user1977

Three years would be an unusually long time to look back though. Three months would be more typical. But you'll just need to deal with it if and when they ask, not much point worrying about it in advance.

Schwarzwald

I am not a bank AML expert, but I would be surprised if just letting money sit in an account for 2-3 years means banks/solicitors dont perform AML checks any longer. For one it doesnt make much sense from a substance perspective, and second it would open the doors to quite easily do exactly what AML check try to prevent: launder money.

But ultimately, speak to your broker and the Lender and see what checks they need to perform, hard to predict that upfront.

Also, times are changing. what  might be deemed as an okay source 3 years ago, might not be deemed an appropriate source any longer. Financial sanctions are changing as we speak to give one example.

Momanns

It probably lessons suspicion but they will be interested in the initial "source of funds". A gift from a father/father in law for a property certainly isn't unusual but they may wish to see bank statements of the account that funded the payment in the EU. However, all processes are slightly different so I would wait to see what/if they ask. 

user1977

Schwarzwald said:

I am not a bank AML expert, but I would be surprised if just letting money sit in an account for 2-3 years means banks/solicitors dont perform AML checks any longer. For one it doesnt make much sense from a substance perspective, and second it would open the doors to quite easily do exactly what AML check try to prevent: launder money.

Where would you draw the line then? You have to stop tracing the source of funds at some point.

If money has been sitting in somebody's account for several years, it's almost certainly their money, rather than an incredibly slow-moving money-laundering scheme.

Schwarzwald

user1977 said:

Schwarzwald said:

I am not a bank AML expert, but I would be surprised if just letting money sit in an account for 2-3 years means banks/solicitors dont perform AML checks any longer. For one it doesnt make much sense from a substance perspective, and second it would open the doors to quite easily do exactly what AML check try to prevent: launder money.

Where would you draw the line then? You have to stop tracing the source of funds at some point.

If money has been sitting in somebody's account for several years, it's almost certainly their money, rather than an incredibly slow-moving money-laundering scheme.

I am not an AML expert so cant answer your first question, but there are for sure many highly paid experts out there who have thought about it, and probably Lenders are following some of these people's guidelines, so one way to find out is to just check with the Lender if they stop caring about the initial source of funds as long as these funds have been sitting in someone's account for long enough?

But to use an extreme case, let's assume somebody has had tax-able income for £70k for the last 10 years. But was gifted £10M 5 years ago from a hard to identify source. I would be surprised if Lenders disregard AML aspects just because it has been sitting in an account untouched for those 5 years - as the question remains independent of time: where does it initially come from?
But again, I am no AML expert and I might be wrong, would be surprised if they didnt care though.

user1977

Schwarzwald said:

user1977 said:

Schwarzwald said:

I am not a bank AML expert, but I would be surprised if just letting money sit in an account for 2-3 years means banks/solicitors dont perform AML checks any longer. For one it doesnt make much sense from a substance perspective, and second it would open the doors to quite easily do exactly what AML check try to prevent: launder money.

Where would you draw the line then? You have to stop tracing the source of funds at some point.

If money has been sitting in somebody's account for several years, it's almost certainly their money, rather than an incredibly slow-moving money-laundering scheme.

as the question remains independent of time: where does it initially come from?

The point is though that you do need to draw a line somewhere, otherwise you'd be trying to trace all funds back to the invention of money. And all AML guidance I've ever seen (and followed) recognises that you need to be pragmatic about what's suspicious and what's not (so taking your example, somebody with a surprisingly large amount of capital might merit further questioning). We're looking for what appear to be material problems, not spending thousands of pounds' worth of time tracking every penny back for years.

aoleks

most will go back 6 months, 3 years is inefficiently long and won't prove anything.

nyermen

Cant speak for OP's conveyencer, but mine went back to the source of my deposit which was about 4-5 years before hand (it was a legacy from my grandmothers will).  They took a copy of the statements showing the payment from the estate's solicitors, and a copy of the will which named me.

I do think they were more thorough than most though.
(This was all in the UK, and I've no idea if they then contacted those solicitors who handled the will to do a further check).

TripleH

I would be surprised if funds given the okay 3 years ago are flagged up now because of a change in view of the country they came from if they have been sat in the Op's bank account.

If new circumstances and information on the person who provided the funds has come to light then thar to me would be where questions are asked.