HMRC NAMES FIRMS PENALISED FOR BREACHING MONEY LAUNDERING RULES

HIS MAJESTY’S REVENUE AND CUSTOMS has named hundreds of businesses which have been fined a total of £3.2m for breaching anti-money laundering regulations. The 240 supervised businesses named on 8 June were fined between 1 July and 31 December 2022 by HMRC for breaching the regulations aimed at preventing criminals from exploiting illicit cash.

In addition to the named businesses, another 179 companies received smaller fines totalling more than £200,000 for rule breaches.

The largest fine – £1.4m – was handed out to Xpress Money Services Ltd, based in London. The penalty was for failing to carry out risk assessments, not having appropriate anti-money laundering controls and failing to conduct proper due diligence checks.

Of the 219 businesses in England fined, 114 were based in London and the South East. In addition, 12 were based in Northern Ireland, six in Wales and three in Scotland.

HMRC’s work with other enforcement agencies and government departments to tackle economic crime and crack down on breaches is working to drive non-compliant firms out of business. That means that the number of money service businesses has fallen by around a third from 1,508 in 2020 to 1,049 in 2023, and the number of money service business agents has reduced from 35,507 to 30,217 in the same period.

Nick Sharp, deputy director of economic crime at HMRC’s Fraud Investigation Service, said: “Money laundering is not a victimless crime. We are here to help businesses protect themselves from criminal attacks and will continue to tackle the minority of businesses which do not comply with the Money Laundering Regulations.

“Serious and organised crime costs the UK billions of pounds every year and our anti-money laundering supervision is a vital tool in combatting that.”

Money service businesses provide vital services to the community, HMRC said, offering currency exchange, money transmission and cheque cashing. However, they can be exploited by criminals to launder the proceeds of crime, so must have a robust risk assessment and policies, controls and procedures to prevent that.

HMRC supervises tens of thousands of businesses across the UK under Money Laundering Regulations, and helps these firms protect themselves from criminals who seek to launder cash or finance terrorism. q

According to the Law Society of England and Wales, proliferation financing is broadly defined by the SRA as: “…the act of providing funds or financial services for use, in whole or in part, in the manufacture, acquisition, development, export, transshipment, brokering, transport, transfer, stockpiling of, or otherwise in connection with the possession or use of, chemical, biological, radiological or nuclear weapons, including the provision of funds or financial services in connection with the means of delivery of such weapons and other CBRN-related goods and technology, in contravention of a relevant financial sanctions obligation.”

The circumstances in which the duty to report discrepancies to company registries now applies are if the business relationship being established is with:

• A company

• A limited liability partnership

• A Scottish partnership

• A trust which is required to register with HMRC’s trust registry

• An overseas entity that needs to register due to ownership of UK

• real property

• The discrepancy is ‘material’ – not a typographical or minor spelling

• mistake

• The discrepancy ‘by its nature and having regard to all the

• circumstances, may reasonably be considered’ to be linked to

• money laundering or terrorist financing, or conceal details of the

• customer’s business. q