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UK's New Money Laundering Regulations Ready To Bite

by Robin Pilgrim, for LawAndTax-News.com, London

07 December 2007


The UK's Revenue and Customs (HMRC) is advising businesses to be ready for the new Money Laundering Regulations (MLRs) that come into effect on 15 December 2007 and which require many types of business to register or re-register with HMRC including Money Service Businesses, Trust or Company Service Providers, High Value Dealers and Accountancy Service Providers.

HMRC's Business Director of Money Laundering Regulations, Melissa Tatton, said: "Businesses that are affected by the money laundering regulations will need to have the right processes in place so they can hit the ground running. From 15 December, businesses that have to take action under the Money Laundering Regulations need to put anti-money laundering controls in place."

The new regulations also require that if such a business is not already supervised by the Financial Services Authority, or a professional body listed in the regulations has not agreed to supervise all relevant activities, they will need to register with HM Revenue & Customs (HMRC). In addition, any person who runs or owns the business, and any nominated officer or money laundering reporting officer, will need to apply for a new fit and proper test designed to make it more difficult for criminals to get access to this sector.

The Money Laundering Regulations 2007 require Trust and Company Service Providers (TCSPs), which have not previously to put in place anti-money laundering controls from 15th December 2007. This means businesses will have to be able to:

  • Carry out checks on their customers’ identities;
  • Identify the risk of money laundering posed by a customer; and
  • Report suspicious activity to the Serious Organised Crime Agency (SOCA).

TCSP’s include:

  • recruitment agencies, involved in arranging for someone to act as either a permanent or interim director, shadow director or company secretary or partner of a partnership;
  • company formation agents;
  • suppliers of accommodation or correspondence addresses;
  • telephone answering services for businesses other than sole proprietors; and
  • people acting or arranging for others to act as professional trustees including will writers and family offices.

HMRC estimates that as many as 10,000 TCSPs will need to familiarise themselves with the new regulations, so is urging anyone who is likely to be affected by these changes to start preparing now.

As part of the transitional arrangements around the introduction of the Regulations, registration deadlines have been set for existing businesses (i.e. those trading on 15 December 2007). The proposed registration deadlines for businesses are 1 February 2008 for Money Service Businesses and 1 April 2008 for TCSPs. Existing High Value Dealers will re-register with HMRC as a part of the annual process by which they renew their registration. HMRC intends to open a register for Accountancy Service Providers on 1 April 2008, with a registration deadline of 1 July 2008. Once the ASP register is closed in October 2008, any new ASP must register with HMRC before they commence trading.

From 15 December 2007, any new business caught by the Regulations must register with HMRC before they commence trading.

To help businesses identify when they need to register, a registration summary is available at http://www.hmrc.gov.uk/mlr/reg-summary.htm

The two forms on the website that businesses need to familiarise themselves with are the updated registration form, MLR 100, and the new 'fit and proper test' form, MLR 101. All those affected (with the exception of existing HVDs, who will be contacted separately by HMRC) will need to register using the revised MLR100 registration notice. MSBs and TCSPs, in addition, will need to complete the new MLR101 fit and proper form for all relevant people within the business as part of their registration application.


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