Tag: supervisor registration

  • 23.09.09 HMRC announce MSB online register

    HMRC had recently sent out a letter to all Money Service Businesses (MSBs) to tell them about their intention to publish an online MSB register by the end of 2009. This register is currently being developed and will be called the MSB online registration check.

    When finished it will allow for a MSB online registration check service, for both the profession and the general public to check they are dealing with a ‘registered’ firm. This is part of the supervisory strategy for policing the perimeter of the regulated sector. Those MSB firms not registered are committing an offence and this allows for checking and the subsequent reporting to HMRC of these businesses. 

    When the register is complete and is available HMRC will let all know through a further announcement on their website. This same process will may apply to both Trust and Company Service Providers (TCSP’s) and Accountancy Service Providers (ASP’s) in 2010 or beyond.

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

  • 02.09.09 BTC to participate in HMRC Forum for TCSP’s

    Steve O’Neill of Business Tax Centre has been chosen to be a part of HMRC’s supervisory forum for Trust and Company Service Providers. This is the second such forum organised by HMRC, the first being one for large money service businesses.

    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.

  • 26.08.09 BTC Challenges HMRC over right to view SAR’s on supervisor compliance visits

    BTC Challenges HMRC over right to view SAR’s on supervisor compliance visits

    HMRC has published its Code of Practice for supervisory purposes for visits to businesses under Money Laundering Regulations (COP28). This Code of Practice tells you what you can expect from HMRC Supervisory staff and what they expect of you when they visit your business under the Money Laundering Regulations 2007.

    This is a simple but very helpful document for preparing for a supervisory visit under the Regulations, however one item contained within the documents raised concern for Steve O’Neill of BTC, namely;

     Examples of business records the officer is likely to want to see include:

    “Records/copies of suspicious transactions, action taken, copies of any Suspicious Activity Reports (SAR’s) submitted to the Serious Organised Crime Agency and any correspondence from them concerning consent.  We will look at Suspicious Activity Reports for anti-money laundering legislation purposes only and not for tax purposes”.

    It is Steve O’Neill’s (Business Tax Centre’s BTC) understanding that SAR’s are an individual’s obligations covered under the Proceeds of Crime Act and not covered under the Money Laundering Regulations which covers a ‘Firms’ obligations to put into place appropriate policies and procedures for the prevention, detection and reporting of suspicious activity, and not the actual SAR itself which has a subjective test  and offences which are covered in PoCA.

    When HMRC regulatory team was asked about their powers to view a SAR, they responded by way of reference to two sections of the Regulations. One of these references was to CDD only and the other to refers to the ‘Policy and Procedures’ for reporting.

    These correspondences have been passed on to other supervisory authorities who can confirm that their opinion also states that the ML Regulations do not give authority for a supervisor to view a SAR, which should only be done by an accredited and trained financial investigator.   

    We understand from a response received from these bodies that this subject will be raised with HMRC at the next ‘affinity group’ meeting of accountancy and taxation supervisors.

    If HMRC point of view is upheld, then the Treasury approved CCAB guidance and the notes of each professional boy will need to be updated accordingly. We will post updates as we receive them.

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

  • 20.08.09 HMRC has published its Code of Practice for supervisory purposes for visits to businesses under Money Laundering Regulations (COP28).

    HMRC has published its Code of Practice for supervisory purposes for visits to businesses under Money Laundering Regulations (COP28). This Code of Practice tells you what you can expect from HMRC Supervisory staff and what they expect of you when they visit your business under the Money Laundering Regulations 2007.

    The type of businesses that is required to register with HMRC under the Money Laundering Regulations and be supervised accordingly are;

    • Money Service Businesses
    • Trust or Company Service Providers
    • Accountancy Service Providers
    • High Value Dealers

    The focus of the visit will be on your business’s risk sensitive anti-money laundering policies and procedures to make sure they successfully manage and reduce the money laundering and terrorist financing risks faced by your business.

    During a visit HMRC supervisory staff we will always:

    • check that the information held on the HMRC register is correct
    • check that the right people within Money Service Businesses and Trust or Company Service Providers have undergone the fit and proper test
    • ask you to explain how your risk sensitive anti-money laundering policies and procedures work
    • answer any questions you have on your legal responsibilities under anti- money laundering legislation
    • look at your risk assessment of the business’s customers, products and services
    • look at the anti-money laundering policies, procedures and training you have implemented to manage and reduce the risks you have identified.

    They may also:

    • examine transaction records and related documents to check that the customer due diligence measures have been adequately applied
    • evaluate your systems for identifying and reporting suspicious activity to the Serious Organised Crime Agency
    • check that your staff are aware of the law relating to money laundering and terrorist financing and are sufficiently trained to recognise and deal with suspicious activity
    • ensure you have adequate systems in place to manage your compliance with the Money Laundering Regulations 2007.

    If you are a Money Service Business or High Value Dealer HMRC may inspect any cash found on the premises.

    The full document can be downloaded in PDF format by clicking on the following link  HMRC Guidance COP28

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

  • 19/02/09 Increase in the Money Laundering annual registration fee

    HMRC today announce an increase of the annual registration fee for businesses registered under the Money Laundering Regulations 2007 to £120. The sectors affected are Money Service Businesses, High Value Dealers, Trust or Company Service Providers and Accountancy Service Providers.

    The Money Laundering Regulations supervisory regime is run on a full cost recovery basis and the fees you pay cover the expense of running the operation. HMRC costs include registering new businesses, contacting and visiting businesses, running an effective risk system, maintaining the register and producing guidance and information for customers.

    Introduced in 2002, the fee was initially set at £100, and was subsequently reduced to £60 from June 2003. There were no changes until 1 June 2007, when the fee was increased to £95; this level was maintained in 2008.

    HMRC state that it is now necessary to increase the fee further in order to provide them with sufficient income to cover their costs over the next year. The cost of registration from 1 June 2009 will be £120 per premises.

    If you are a registered Money Service Business, High Value Dealer, Trust or Company Service Provider or Accountancy Service Provider, you do not need to do anything now. Your next fee renewal notice (MLR 113) will be sent to you as normal and will be based on the new fee level.

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

  • 01/01/09 Important Notice for Accountancy Service Providers who have failed to apply for Money Laundering Regulations Registration.

    If you are in business as an Accountancy Service Provider and are required to register with HMRC or an approved professional body under the Money Laundering Regulations 2007 you are trading illegally if you missed the deadline of 1 January 2009 and may be liable to a penalty or criminal prosecution.

    To avoid penalties or prosecution, however, make an unprompted disclosure and send HMRC your completed application form MLR100 and appropriate fee (£95.00) without further delay. Forms and fees should be sent to:

    Money Laundering Regulations Registration Team.

    7th Floor, Alexander House, 21 Victoria Avenue Southend–on-Sea, SS99 1AG

    If you are prompted over non registration by your supervisor either by letter or by phone, the minimum penalty will be £500.

    The penalty for breaches of the registration  process is up to a maximum of £5,000 if the breach was a failure to take reasonable steps. However this can be increased if the breach was deliberate. This will also include future amendments to your registration details.

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

  • Q. What is an external accountant or tax advisor?

    The CCAB Guidance on this point says:  “Regulation 3(7) defines external accountant as someone who provides accountancy services by way of business to other persons, when providing such services.

    Accountancy services include the recording, review, analysis, calculation or reporting of financial information and covers professional bookkeeping services, preparing or signing accounts or certificates of financial information concerning a person’s or organisation’s financial affairs, and advising on tax.

    Tax advice is widely interpreted and includes tax compliance services such as assisting in the completion and submission of tax or duty returns. Businesses assisting in the completion and submission of tax returns in relation to any tax will fall within the scope of the Regulations. Businesses providing advice relating to the liability of a particular commodity to a tax or duty or the amount of tax or duty due will also fall within the scope.

    Therefore any bookkeeper, payroll bureau, accountancy service provider, tax advisor of any grade or level, qualified or unqualified will have obligations under POCA and if operating as a businesses will have an obligation to register for compliance supervision before commencing businesses.

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

  • Q. What are the Specific Breaches of the Money Laundering Regulations?

    The specific failings and breaches which are clearly defined within the Money Laundering Regulations 2007 are;

    • Regulation 7 – Failure to apply appropriate risk-sensitive customer due diligence measures
    • Regulation 8 – Failure to apply appropriate and risk-sensitive ongoing monitoring of a business relationship
    • Regulation 9 – Failure to comply with the requirements in timing of verification of identity of clients and any beneficial owner
    • Regulation 11 – Continuing with transaction/business relationship where unable to apply customer due diligence measures
    • Regulation 14 – Failure to apply enhanced client due diligence and ongoing monitoring where required
    • Regulation 18 – Failing to follow a direction made by HM Treasury under this Regulation
    • Regulation 19 – Failure to keep the required records
    • Regulation 20 – Failure to establish, maintain, monitor and manage the required risk based policies and procedures
    • Regulation 21 – Failure to take appropriate measures to provide the required training
    • Regulations 26, 27(4), 33 – Failure to comply with registration requirements specified by the commissioners

    These breaches may attract civil or criminal procedures from your supervisor

  • Q. I am just starting out in business in the regulated sector, what should I do?

    Your first requirement before commencing work is to be registered for compliance supervision with an appropriate supervisor.

    To commence in business without the appropriate registration means you are committing a criminal offence. The penalty for this is up to a maximum of £5,000 if the breach was a failure to take reasonable steps. However this can be increased if the breach was deliberate.

  • Q. What is my supervisor looking for me to do?

    In simple terms there are four main things which all firms must do and be able to demonstrate compliance to a Supervisor, they are:-

    1. Your firm must adopt appropriate policies and procedures for compliance for which the MLRO must implement into the systems of the firm.
    2. Ensure that all staff have adequate training on understanding their roles and responsibilities under the UK’s AML regime, the offences for ML and procedures including client due diligence and reporting.
    3. Conduct client due diligence (CDD) procedures on all clients no matter how long they have been clients, including those pre 1 March 2004 clients at an appropriate time, including risk assessment, identity and verification and ongoing monitoring. 
    4. Implement a reporting regime for the reporting of Suspicious Activity Reports (SAR’s) to the Serious Organised Crime Agency (SOCA).  

    You must ensure that all these policies & procedures, evidence of identity and account opening procedures, internal & external reports and any other AML procedural matters are documented correctly and records kept for a minimum of 5 years.