Purchaser buying with funds connected with high-risk for money laundering country

TripleH

The process is to check where the funds have come from. If the buyer can show the funds have come from an account remaining untouched (no funds added) since before the named people left the country then that will speed things up. The issue comes from whether additional funds have been added and their origin.

RogerPensionGuy

Cutesyusername said:

Our cash purchaser is buying our house with a substantial loan from a relative who moved to a 'high risk' country. Although the funds originated in and never left the UK, they are obviously subject to very stringent AML checks. Does anyone have any experience with this and know of the chances of the funds being allowed, or is this just likely to be a lengthy waiting game with a poor chance of success (and us waiting for weeks then having to put the house back on the market).

A good thread this as the % of housing sales using much larger amounts of cash instead of mortgages has really ramped up lately plenty of cash is moving all over the place. 

Is your buyer using a UK mortgage?

Which hi risk County in question?

Why wasn't your agent fully aware of the circumstances now in play?

Cutesyusername

Thanks for responses - much appreciated. To answer some questions:

The estate agent just checked that the money was in the UK (it was and always has been) and that the account holder was willing to make the loan (they are). Having not dealt with this scenario before, the association with a high-risk country didn't ring any alarm bells for them.

I don't know if the account has been active since the money was deposited.

The buyer is using their own cash to make up the shortfall, so no mortgage involved.

The country in question is Turkey.

The buyers didn't know that there would/could be an issue with the source of funds until told very recently by their conveyancer who has said that he can't act on their behalf for checking the funds due to 'compliance issues', therefore they are having to find a different solicitor to deal with just the AML aspect (proving difficult and expensive, but buyers are willing to take on the cost as they really want the house).

Buyers are decent folk and we all really want this to work out, but as mentioned, I don't want to hold it off the market for another indefinite period without some idea whether or not there is some small reassurance that these thing sometimes do. I know this is 'how long is a piece of string' and depends on their particular circumstances, but can't find out whether or not 'any' transactions of this sort have a good outcome. 

AskAsk

A large loan from a relation is always going to be a problem with ALM and the relation moving abroad is only going to raise suspicion that it is a back door to getting illegal money out of the country, so I can see this being a problem.  If it was me, I would give them a couple of weeks to get it resolved and then put the house back on the market and say that they can continue with the funds process while the house continues to be advertised.  Properties do not have to be taken off the market for the buyer to continue with the conveyancing process.

HobgoblinBT

Which high risk country is the purchaser residing in?  The reason for asking is that there will be more issues if the “gift” is from a resident of a sanctioned country or from a sanctioned individual or PEP.

sheramber

The purchaser is in the UK.

it is the relative who is lending the money who has gone to Turkey ( OP stated above) but left money behind in a UK bank account.

gazfocus

It does sound like it could be a way to launder money so I can see why the solicitors are being cautious...i.e. money sat in the UK untouched for a number of years, which the relative can't get out of the country without a paper trail. They loan that to be used to pay for house, then gets it paid back with the sale proceeds of your buyers house, giving a paper trail for the origin of the 'new' funds, and therefore the relative can get the funds out of the country.

Obviously, it could all be completely innocent and I hope it all goes smoothly for you.

user1977

gazfocus said:

It does sound like it could be a way to launder money so I can see why the solicitors are being cautious...i.e. money sat in the UK untouched for a number of years

Sounds unlikely though - if they were laundering money, it's unlikely they'd want to twiddle their thumbs for years at any stage in the process. Generally they want to get it moved around and "cleaned" as quickly as possible.

gazfocus

user1977 said:

gazfocus said:

It does sound like it could be a way to launder money so I can see why the solicitors are being cautious...i.e. money sat in the UK untouched for a number of years

Sounds unlikely though - if they were laundering money, it's unlikely they'd want to twiddle their thumbs for years at any stage in the process. Generally they want to get it moved around and "cleaned" as quickly as possible.

I am naturally a suspicious person so part of me thinks it could have been left for years til it was there long enough to not raise too much suspicion, maybe they were waiting for an ideal opportunity, etc, but then again, the likelihood of it being sat in a bank being 'dirty' money is probably very low

AskAsk

user1977 said:

gazfocus said:

It does sound like it could be a way to launder money so I can see why the solicitors are being cautious...i.e. money sat in the UK untouched for a number of years

Sounds unlikely though - if they were laundering money, it's unlikely they'd want to twiddle their thumbs for years at any stage in the process. Generally they want to get it moved around and "cleaned" as quickly as possible.

not necessarily.  it may be money that they have gained that they can't actually explain if anyone looked into it in great detail.  if they moved the money out of the UK, eyes may start to look, and so it is better to divert attention by moving it out of the UK via channels rather than directly.  to give the buyer the large loan, may be good reason to move such a large amount without suspicion and then the money could be paid back slowly by the buyer without raising suspicion.  if i was doing the ALM, red flags would be popping up all over the place for me.