Do you rent properties? Are you a letting agent? if so, are you managing Russian Sanction Risk?

In Jersey, if you are a letting agent and/or renting properties and administering or managing funds or money on behalf of other persons you should ensure you are managing Russian sanction risk

In the Proceeds of Crime (Jersey) Law 1999, the activity caught is as follows:-

- https://www.jerseylaw.je/laws/current/l_8_1999

If you are caught by the proceeds of crime law, the key steps to implement are:-

1. Know Your Customer (KYC): Conduct thorough due diligence on tenants and property owners to ensure they are not designated persons or entities owned or controlled by designated persons under UK sanctions.
2. Screening: Use reliable screening tools to check tenants and property owners against the UK's sanctions lists.
3. Reporting Obligations: Be aware of your legal obligation to report any suspected breaches of sanctions regulations to the Office of Financial Sanctions Implementation (OFSI) or in Jersey the Minister for External Relations [MER]
4. Training: Ensure that staff are trained to recognise and report suspicious activities that may indicate a breach of sanctions.
5. Compliance Policies: Develop and implement robust compliance policies and procedures to manage sanctions risk effectively.

Also, you should consider the following guidance

Letting agents

140. Does this reporting requirement apply to commercial lettings as well as residential?  

The reporting requirement applies to “letting agency work”, which may include commercial and/or residential lettings activity. You should consult the legislation and OFSI’s guidance to determine what activity is in scope.

Added on: 12 Mar 2025

141. What if I am not a letting agent but I carry out letting activities, e.g. a block management company or an estate agency, is this in scope of the reporting requirements? 

Any activity which meets the definition of “letting agency work” as given in the legislation could mean that you are a “relevant firm” and thus subject to the sanctions reporting requirements. The key thing is that you are engaged in work done in response to instructions received from a “prospective landlord” (i.e. someone seeking to find another person to whom to let land for a term of a month or more) or a “prospective tenant” (i.e. someone seeking to find land to rent for a term of a month or more).

Added on: 12 Mar 2025

142. The guidance states that the reporting obligation applies to a letting agent from the point that the prospective landlord instructs the letting agent. When precisely is the point of instruction? 

The reporting obligation applies to “relevant firms” which include those carrying out letting agency work. The definition of letting agency work includes a reference to the point that the prospective landlord instructs P, which means from the point of instruction onwards, i.e. that same day.

Added on: 12 Mar 2025

143. Are letting agents required to continually monitor tenants and landlords for inclusion on a sanctions list, or should checks be completed only before concluding a contract?   

It is up to letting agents to determine how they wish to ensure they comply with financial sanctions prohibitions, and this may involve the use of sanctions screening tools. The requirement to comply with sanctions prohibitions is separate and in addition to the new reporting obligation. 

There is no requirement in the legislation for letting agents to screen all landlords and tenants against sanctions register. However, letting agents must ensure that they do not breach financial sanctions prohibitions in the legislation (which include, for example, “dealing with” funds owned, held or controlled by a Designated Person, or making funds available to a Designated Person).

Added on: 12 Mar 2025

144. Do non – transactional activities, such as a rent review, carry reporting requirements?    

An activity like rent review on an existing tenancy would not carry reporting requirements. The focus is on the actions leading up to the transaction of letting land and the conclusion of the agreement for the letting of land.

Added on: 12 Mar 2025

By following these steps, letting agents can help ensure they are not inadvertently facilitating transactions that breach UK sanctions regulations.

Source

https://www.gov.uk/government/publications/uk-financial-sanctions-faqs/uk-financial-sanctions-faqs