MLR1PP8950 - Penalties Guidance: Step 6: The cumulative scale charge

The cumulative scale charge should only be applied to the number of relevant clients in the relevant period who were not monitored as a consequence of the breaches. The onus is on the business to demonstrate which of the relevant clients in the relevant period were not subject to the breaches and provide evidence to verify this. If these details are not provided the cumulative scale charge will be based on the total number of relevant clients.

The number of relevant clients who can be excluded will depend on the nature of the breaches that have been identified.

The following are examples of relevant clients who should not be included (where sufficient evidence can be provided):

• Relevant clients who were provided with advice, services or products which are not regulated under MLR 2007. More guidance on this can be found in MLR8 and MLR9 and MLR3.
• Relevant clients who were dealt with by staff who were trained and correctly applied anti money laundering controls
• Relevant clients who were dealt with at a set of premises where there were no regulatory breaches

Once the number of relevant clients subject to the breaches in the relevant period and the number of relevant clients in a 12 month period (when the additional scale charge is applicable) has been established, these details can be used to calculate the additional starting penalty using the scale charge tables printed below.