Implemented in 2008, HMRC’s Money Laundering Regulations were designed to prevent at-risk businesses in the UK financial system from being used to launder money by terrorists and criminals. These regulations are very important and must be followed closely to ensure compliance, legality and safety.
From appointing a nominated officer to undertake company checks that confirm the identity of clients and ‘beneficial owners’ using services like RM Online’s free company checker tool (which gives you valuable insight into the financial affairs, history and legal issues of company directors and other businesses), to preserving all documentation of financial transactions, customer identity and risk management – staying compliant is an important but time-consuming task. Not sure whether or not your business is subject to these regulations, what they mean, why they exist or how they work? Don’t worry, we’ve put together a quick, comprehensive guide below.
Do the money laundering regulations apply to me?
There are four business types who are required to sign up to money laundering regulations for direct supervision by HMRC:
- Accountancy service providers
- Businesses who provide money services
- High value dealers
- Trust and company service providers
Many other areas of business (like estate agency and legal services) are susceptible to money laundering, and regulated by HMRC, but most have their own professional bodies (such as the Law Society) who monitor compliance with money laundering regulations.
What controls do you need to implement?
If you are operating under these regulations there are a number of regular tasks and checks you must undertake to ensure you are not unwittingly enabling money laundering. Your responsibilities include:
- Appointing a nominated officer
This internal figure will ensure that all regulations are met and required tasks are completed.
- Assessing risk
It is your responsibility to assess the risk of money laundering occurring through your business. Understanding where your weakness lie and how susceptible your company is to the activities of criminals and terrorists is essential to preventing money laundering.
- Confirming identities
From clients and customers to the ‘beneficial owners’ of your corporate body or partnership, you must take responsibility for confirming the identity of the parties you work with. Free company checking tools as outlined above are a good place to start with this important, ongoing task.
- Monitoring behaviour
It is also your duty to keep tabs on the activities of your customers. If anything seems suspicious you must immediately report the activity to the Serious Organised Crime Agency.
- Keeping control
You must have robust management control systems in place at all times.
- Preserving documentation
No matter how small or insignificant, you must keep copies of all financial transactions, customer identities, your management processes and your risk assessments.
- Ensuring employee awareness
Keeping your employees informed of all regulations is crucial for effective anti-money laundering processes. Providing training is your responsibility.
Are you up to date with HMRC’s 2008 money laundering regulations? How do you find the time and space to ensure all of your responsibilities are complied with? Share your tips and experiences below?