In its duty as an MLR supervisor, HMRC has published details of businesses that do not comply with the regulations
The 2017 Money Laundering Regulations introduced the requirement for all AML supervisors, including ICB, where appropriate to publish the name and address of any of its supervised businesses that do not comply with the regulations.
Whilst HMRC records a total value of penalties of nearly £2.5m for the period between 26 June 2017 and 31 July 2018, only four businesses were 'named and shamed' under the requirements of the 2017 MLRs. 535 penalties were imposed for non-compliance with the 2007 MLRs as the breaches themselves were made when they were still in force prior to June 2017.
Breaches to the MLR include failure to have in place effective:
- customer due diligence
- risk assessments
- policies, controls and procedures
- record keeping
HMRC, like ICB and all MLR supervisors, sets out to ensure that penalties for a failure to comply are:
- proportionate to the failure
- sufficient to dissuade non-compliance
HMRC charges a starting penalty of £5000, a penalty administration fee of up to £1500 as well up to £350 in additional fees for failure register, inform HMRC of any changes to details, or failure to provide information. Penalties are however capped at 10% of annual gross profits.
ICB and other MLR supervisors in the UK, including HMRC, help ensure that businesses comply with the MLRs and complete adequate customer checks to protect themselves and their services from being exploited for the purposes of money laundering and terrorist financing. Certain types of legitimate business services such as accountancy and bookkeeping can be attractive to criminals, who exploit them to launder money or finance terrorism. Life is made easier for criminals when insufficient controls are in place and they can transfer the proceeds of crime through legitimate sources, without being caught. It is therefore extremely important for practising bookkeepers to put in place adequate measures to detect money laundering and prevent criminals from using their services in this way.
ICB currently supervises over 3500 bookkeeping practices who, in most cases, operate effectively to comply with the rules. ICB has a dedicated AML Support Team led by Stephen Hardwick, ICB director of compliance, which supports members through a targeted programme of monitoring, education and guidance. This includes ICB's AML Online tool which enables practices to record due diligence and carry out risk assessments.
Criminal Offences
The MLRs 2017 also make it possible for supervisors to pursue a criminal prosecution for a supervised business, which could lead to a fine and up to two years in prison. Non-compliance with the MLRs may also lead to offences under the:
- Proceeds of Crime Act 2002
- Terrorism Act 2000
You can get more detailed information about the criminal offences and penalties for money laundering and terrorist financing on anti-money laundering here:
You can find the full list of fined companies on the HMRC website here.
As ICB members in practice will know, recent updates in legislation required practising members to provide ICB with a basic disclosure certificate. You can find full details of this on the ICB website here.
Details of ICB fines and Sanctions can be found here.
