TT49: Money Laundering Regulations 2003

March 23, 2004

What is Money Laundering?
‘Money laundering’ is exchanging criminally obtained money or other assets for ‘clean’ money or other assets with no obvious link to their criminal origins. It also covers money, however come by, which is used to Changes from April 2004 fund terrorism
Changes from April 2004
The Money Laundering Regulations 2003 now affect most businesses in the financial sector, including accountants and lawyers – but from 1 April 2004 new rules come into force for other businesses including Money Services Businesses (e.g. third party cheque cashers or bureaux de changes) and High Value Dealers (“HVD”). This issue focuses on the latter category.
Are you a High Value Dealer?
Businesses that deal in goods and accept (or are prepared to accept) in cash the equivalent of 15,000 Euros or more for any single transaction are classed as HVDs. This is irrespective of whether they actually have had any such transactions recently.

Barnes Roffe Topical Tips

If you think your business is a HVD initially you must:

  • register with H M Customs & Excise (“HMCE”) before 1 April 2004. HMCE is responsible for the compliance of HVDs. Forms MLR6, MLR100 and MLR102 apply
  • look here on HMCE’s website for the guidance forms or call HMCE on 0845 010 9000 for a registration pack
  • register each legal entity and each place of business in your organisation that has the policy of accepting over 15,000 Euros in cash for any single transaction. It costs £60 per year per premises
  • be aware that although the HVD rules do not cover businesses that accept cash for services, if you are in a position where you act as an agent selling goods, you will still have to be registered
  • set up Anti-Money Laundering Systems to enable you to identify and prevent money laundering and to report suspicious transactions to the National Criminal Intelligence Service (“NCIS”). A guide to setting up your systems can be found in notice MLR7.

And then on an on-going basis you must:

  • keep the Anti-Money Laundering systems in place
  • appoint a nominated Officer to be responsible
  • train your staff
  • confirm the identity of your customers
  • hold all records for at least 5 years
  • tell HMCE of any relevant changes to your business within 30 days using form MLR112
  • avoid the offence of “tipping off” where a customer is alerted to your suspicions
  • have a policy of notifying your appointed Officer of suspicions and a system for making immediate reports to NCIS
  • obtain proof of identity for all customers who pay more than 15,000 Euros (or equivalent) in cash for a single transaction and retain it for at least 5 years
  • where your customer is a limited company, identify both the company and the individuals you deal with who have authority within that company to move funds

Topical Tips is designed to be a simple and useful source of ideas and information for clients and contacts of Barnes Roffe LLP. If you are unsure about the implications of any idea contained therein please contact your Barnes Roffe LLP partner. Barnes Roffe LLP cannot take responsibility if the ideas are implemented without its involvement. Be aware this is only a summary of complex regulations and if you are in doubt you must seek advice. Your Barnes Roffe LLP contact partner will be pleased to talk this over.

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