The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, (‘the Regulations’), came  into force on the 26th June 2017 with the purpose of developing a more risk based approach to preventing money laundering and the financing of terrorism.

More than one hundred thousand businesses are covered by the Regulations and which must manage their risks and know their customers.

Such businesses include financial institutions, auditors, legal advisors, insolvency practitioners, tax advisors, estate agents, casinos and trust or company service providers.

Some Of The Obligations Outlined In The Regulations:

  1. Regulation 18

A relevant person must take appropriate steps to identify and assess the risks of money laundering and terrorist financing to which the business in question is subject.  An up to date record in writing of all the steps undertaken as part of the risk assessment must be kept.

  1. Regulation 19

A relevant person must establish and maintain policies, controls and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing identified in any risk assessment undertaken as part of Regulation 18.  They must be regularly reviewed and a record maintained in writing.

  1. Regulation 21

An individual must be appointed as the officer responsible for compliance with the Regulations.

  1. Regulation 24

A relevant person must take appropriate measures to ensure the relevant employees of the business are made aware of the law relating to money laundering and are regularly given training in how to recognise and deal with transactions and other activities which may be related to money laundering or terrorist financing.  A record in writing must be kept of that training.

  1. Part 3

This relates to customer due diligence checks which must be considered, applied and maintained.

The Powers Of Investigation

Under Part 66 of the Regulations, a supervisory authority may, by notice in writing to a relevant person require:

  1. The provision of specified information
  2. The production of specified documents
  3. Attendance before an officer of the supervisory authority at a time and place specified to answer questions.

Part 69 allows a duly authorised officer to enter premises, inspect, observe and copy any documents if there are reasonable grounds to believe the Regulations are being contravened, without the production of a warrant.

Part 70 deals with entry of premises under a warrant.

What Are The Sanctions?

Civil Penalties  

Parts 76, 77 and 78 state that if the supervisory authority is satisfied that a contravention of the Regulations has taken place it can:

  1. Impose a penalty of such amount as it considers appropriate;
  2. Publish a statement censuring the person;
  3. Cancel or suspend permission to carry on regulated activity;
  4. Place limitations or restrictions on the business;
  5. Impose temporary or permanent prohibitions on individuals from having supervisory / management roles.

Criminal Offences

A person who contravenes a relevant requirement imposed on that person is guilty of a criminal offence which is an ‘either way offence’ and can be dealt with either in the Magistrates’ or the Crown Court.

If convicted In the Magistrates’ Court,  the maximum sentence is one of three months imprisonment and / or a fine.

In the Crown Court the maximum term of imprisonment is two years.

A person is not guilty of an offence if it can be shown that person took all reasonable steps and exercised all due diligence to avoid committing the offence.

If an offence is committed by a body corporate and it can be shown to have been committed with the consent or the connivance of an officer of the body corporate or to be attributable to any neglect on the part of an officer, then the officer is guilty of the offence and liable to prosecution as well.

How Can We Help? | Kangs Financial Fraud Team

Kangs provides an expert  team of solicitors experienced in FCA and financial investigations of every nature from the outset through to trial.

Our team is led by Hamraj Kang who recognised as a leader in this field and is ranked as a ‘star individual’ in the legal directory Chambers & Partners.

If you need help in relation to any FCA investigation or prosecution, please do not hesitate to contact our team through any of the following:

If you need help in relation to any FCA investigation or prosecution, please do not hesitate to contact our team through any of the following:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
07779 055907 | 0121 449 9888 | 020 7936 6396

Tim Thompson
tthompson@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396 | 07710 67 77 67