With the agreement of Richard Braysher of 2 High Road, Eastcote, Pinner, Middlesex, HA5 2EW, the Investigation Committee made an order that the member be severely reprimanded, fined £5,000 and pay costs of £1,280 with respect to a complaint that:

1 Between 28 September and 3 March 2010 Mr Braysher failed to comply with written assurances he had given on or about 28 September 2006 following a Quality Assurance Visit that he would:

Under the Money Laundering Regulations 2007:
a. have procedures in place to perform on-going client due diligence;
b. attend external training on the money laundering regulations and;
c. undertake a compliance review.

Former ATT President

On 18 June 2010 the case manager wrote to Mr Honeywell asking him to provide additional information to address the outstanding issues arising from the visit. These are summarised as follows:

Details of the steps he has taken to establish the adequacy of the money laundering procedures undertaken by social services on clients that are referred to him and the basis on which he is able to rely on these procedures

Just before the hearing day, the defendant’s solicitors wrote to the tribunal putting forward various points said to be in mitigation. This included that the Practice Assurance visit had ‘passed’ the defendant’s practice in most aspects and that it was unrealistic to expect the Money Laundering Regulations to apply in relation to clients in receipt of social services funding for their care.

The tribunal did not view either of these points as mitigation. First, Chartered Accountants can be expected to comply with professional standards and partial compliance does not excuse what amounted to a wilful refusal to cooperate with the ICAEW with regard to the areas of non-compliance. In relation to the Money Laundering Regulations, whilst the defendant’s conduct did not amount to the most serious of breaches, the defendant had failed to show any willingness to engage with the ICAEW on this. Had he done so and discussed how he could carry out a modified version of identity checks and thereby compliance, the tribunal might have been more sympathetic.

It was the role of the ICAEW to maintain the standards amongst the profession of chartered accountancy. An important part of this is the Practice Assurance. An equally important part of a chartered accountant’s professional standards and indeed the protection of the public, is compliance of money laundering requirements. The defendant had fallen below the professional standards expected of chartered accountants.

The tribunal ordered that Peter Royston Honeywell FCA be severely reprimanded, pay a fine of £5,000 and costs of £2294

Consent Orders made on 1 June 2010

With the agreement of Andrew Nigel Hamilton of 38 Dean Park Mews, Edinburgh EH4
1ED, the Investigation Committee made an order that the member be severely
reprimanded, fined £2,000 and pay costs of £1,080 with respect to a complaint that:

In February 2007, Mr A N Hamilton FCA acted for X on behalf of his firm, Y, when he
had failed to verify her identity or keep records of the evidence obtained, contrary to
section 18 of the anti-money laundering ‘Second Interim Guidance for Accountants’
D6448

Consent Orders made on 28 July 2010

With the agreement of Michael Martin Shenker of 5Wellesley Court, Apsley Way,
London NW2 7HF, the Investigation Committee made an order that the member be
severely reprimanded, fined £5,000 and pay costs of £2,075 with respect to a
complaint that:

Between 7 June 2005 and 16 February 2006 Mr M M Shenker FCA failed to comply with
statement 1.304 of the Members Handbook in that he failed to make a suspicious activity
report on a timely basis to the National Crime Intelligence Service when he had a
suspicion or reasonable grounds to suspect that Mr X’s activities in relation to the
business of Y Limited were unlawful. D6496

It does come as no surprise, therefore, that the Financial Services Authority (FSA) has recently censured and banned three directors from acting as senior managers for failing to meet their supervisory standards. The FSA investigation found that the directors had been relying too heavily on external consultants for advice on how to run their business.

It is equally unsurprising then that HM Revenue & Customs (HMRC) have also announced that they take the same view to the FSA in relation to businesses meeting their obligations under the Money Laundering Regulations.

HMRC also state that they have no objections to businesses getting advice from external consultants regarding their obligations under the Regulations, as long as the responsibility for complying with the Regulations remains on the business rather than any consultant.

What does come as a surprise is that some consultants, who should frankly understand the Regulations better, have recently offered their services to act as the Nominated Officer for a business. HMRC has no formally announced that it does not consider that a consultant outside the business can be appointed Nominated Officer for any of the businesses HMRC supervise under the Regulations.

HMRC now state that between the four sectors they have responsibility for supervision they now have over 18,000 registered firms, of which just over 12,000 are accountancy service providers (ASP’s).
HMRC in 2009, data mined tax return information and found that there are over 92,000 ASP’s, ranging from the small bookkeeper or payroll bureau to the major firm of Chartered Accountants.

When you actually work out who, from this total figure, is actually supervised by one of the other supervisory bodies, you find a massive short fall in registered firms.  For example, the ICAEW has around 16,500 firms it supervises, this is the largest of the accountancy bodies; the AAT for example has 3,500 generally smaller firms under its wing. In total you find that between the professional body supervisors they account for less than 38,000 of the total in the sector.

When you add in the 12,000 HMRC firms you find you have a short fall over around 42,000 firms, for whom, after one and a half years of committing a criminal offence by operating unregistered for AML supervision still carry on regardless.

With HMRC setting the starting penalty for non-registration at £5,000, you would think it would act as a deterrent. HMRC have been working in conjunction with the other supervisor bodies to work out who of the 92,000 is not currently registered. With HMRC’s policy of ‘policing the perimeter’, I believe that a lot of penalty notices will be hitting many a firms door mat by the end of 2010.

HMRC announce that a new late registration penalties policy has been introduced for Money Service Businesses, (MSBs) High Value Dealers, (HVDs) Trust or Company Service Providers, (TCSPs) and Accountancy Service Providers (ASPs).

Should businesses fail to register with HMRC they will be liable to a fixed penalty and any unpaid fees. These penalties only apply to businesses that must be registered with HMRC.

The new late registration penalty will be based on fixed penalty and any unpaid fees. This fixed penalty had been set at a £5,000. HMRC may issue a reduced penalty to businesses who notify them that they have been operating without being registered with us. This partial voluntary disclosure may lead to reductions in the penalty up to 70%.  

Additional information for Trust of Company Service Providers and Accountancy Service Providers

From 01 April 2010 Trust or Company Service Providers and Accountancy Service Providers who have not registered with us will be liable to a penalty or prosecution.

If you send HMRC your completed application form and appropriate fees without further delay you may be given a reduced penalty. Under the Money Laundering Regulations Trust and Company Service Providers also have to apply for a ‘fit and proper’ test as part of the registration process.

If you are a Trust or Company Service Provider which should be registered with HMRC but cannot submit all completed fit and proper forms, then you should at least send us application form MLR 100 immediately.

Send the completed F&P forms with the fee as soon as possible thereafter because, without them, your application is not complete. Forms and fees should be sent, along with a brief note explaining why your application is late and/or incomplete, to:

Money Laundering Regulations Registration Team
HM Revenue and Customs
7th Floor, Alexander House
21 Victoria Avenue
Southend-on-Sea
SS99 1AG

Carrying on business having failed to do so could result in the imposition of a fine by the OFT, a prison sentence, or both.

Money laundering controls help prevent legitimate businesses being used to launder money, which is where cash or assets obtained by criminal activities are exchanged for clean money or assets with no obvious link to their criminal origins.

John Parker, OFT Director of Anti Money Laundering, said:

‘The consequences for estate agents and consumer credit financial institutions of not registering under anti-money laundering regulations are severe. It is important that businesses register immediately to avoid breaking the law.

Visit the BTC website for compliance help and support for firms in the regulated sector

The forums organised by HMRC’s ‘Money Laundering Regulations Team’ meet regularly to facilitate discussions where information is shared, presentations given. These forums are to share best practice tips and ideas and to support the supervisory regime through open dialogue and engagement so that HMRC supervisory and compliance teams and the businesses they supervise can improve their compliance efforts.

The first meeting of the TCSP’s forum is to be held in London on 5th October 2009. Steve O’Neill will report back on this blog of matters arising and of supervisory ideas and best practice generated at these meetings.

Visit the BTC website for compliance help and support for firms in the regulated sector.