Money Laundering Regulations are designed to protect the UK financial system. If your business is covered by the regulations you must put in place certain controls to prevent it being used for money laundering by criminals and terrorists. These include appointing a 'nominated officer', checking the identity of customers and keeping all relevant documents. You must also report any suspicious activity to the Serious Organised Crime Agency.
If your business is covered by the regulations it must be monitored by one of the supervisory authorities. It may already be monitored, for example by the Financial Conduct Authority or by a professional body. But if it's not, and your business falls into one of four designated business sectors, you'll probably need to register with HM Revenue & Customs (HMRC).
This guide will help you decide whether Money Laundering Regulations apply to your business and understand your responsibilities if they do.
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Money laundering means exchanging money or assets that were obtained criminally for money or other assets that are 'clean'. The clean money or assets don't have an obvious link with any criminal activity. Money laundering also includes money that's used to fund terrorism, however it's obtained.
The Money Laundering Regulations 2007 came into force in December 2007.
All businesses that are covered by the regulations have to put in place suitable anti-money laundering controls. If the regulations apply to your business you must put these controls in place as soon as possible.
The Money Laundering Regulations apply to a number of different business sectors, including financial and credit businesses, accountants and estate agents.
Every business that's covered by the regulations must be supervised by a supervisory authority. Your business may already be supervised, for example because you belong to a professional body like the Law Society. But if it's not, and your business falls into one of four business sectors, you're likely to have to register with HMRC.
HMRC supervises the following four business sectors:
If your business is covered by the Money Laundering Regulations you must put in place certain controls to prevent it from being used for money laundering. These include:
As part of the anti-money laundering controls that you have to put in place, you need to appoint a nominated officer (sometimes called the money laundering reporting officer).
If anyone in your business knows or suspects that another person is laundering money or financing terrorism, they must tell the nominated officer. The nominated officer then has to review the information they have received and decide if it needs to be reported to the Serious Organised Crime Agency (SOCA). Once the nominated officer decides there are reasonable grounds to suspect money laundering they must tell SOCA at the earliest possible opportunity. The nominated officer should get consent from SOCA to complete the transaction. If it is not possible to delay the transaction to get consent, the nominated officer should inform SOCA of this when they send their report.
If your business doesn't have any employees you don't need to appoint a nominated officer because you're the person who is directly responsible for informing SOCA.