Money laundering (as relates to compliance checks)

By Tolley

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

Money laundering (as relates to compliance checks)
Introduction
Tax offences generally
Tipping off
Civil offences
Reluctance to correct past errors
Tax evasion
The privilege reporting exemption
New clients / review of existing clients
EU Payments Regulation
Conclusion

This guidance note gives an overview of the obligations imposed on tax advisers in relation to money laundering offences. For more details, see Simon’s Taxes Division A7.1 (subscription sensitive).

Introduction

All businesses that are covered by the Money Laundering Regulations 2017 have to put in place suitable anti-money laundering controls. The 2017 regulations replaced the previous 2007 regulations with updated provisions that essentially represented an evolution of the regime and reorganisation of the structure. They took effect from 26 June 2017, having been formally laid before Parliament on 22 June 2017. This consequently gave advisers very little time in which to prepare for the new regulations although they had been widely consulted on.

SI 2017/692; SI 2007/2157 (both subscription sensitive)

Broadly, the 2017 regulations are more prescriptive in the risk assessment and record keeping requirements. There were no wholesale radical reforms. The key changes that may be of practical significance to tax advisers include:

•tightening up the general risk assessment requirements ― requiring specific issues to be considered and risk mitigation policies to be documented in writing
•a higher level of customer due diligence, particularly in relation to corporate clients, those resident in ‘high risk’ countries and those involving ‘politically exposed persons’

The regulations apply to different business sectors, including accountants. Businesses that are covered by the regulations must be monitored by a supervisory authority, for example a professional body. If a business is not covered by a supervisory authority, it may have to register with HMRC. The information is included on MLR9 Registration Notice and contains information for the following businesses which are supervised by HMRC: