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HMRC as MLR supervisor

HMRC as MLR supervisor. Jenny Cowles 25 February 2010. What is money laundering?.

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HMRC as MLR supervisor

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  1. HMRC as MLR supervisor Jenny Cowles 25 February 2010

  2. What is money laundering? • Money laundering is the process by which criminally obtained money or other assets are exchanged for ‘clean money’ or other assets with no obvious link to their criminal origin - and it includes money to fund terrorist activity

  3. Businesses we supervise • MONEY SERVICE BUSINESSES (MSBs) • bureau de change • cheque cashing • money transmitter • (in December 2009 businesses = 3,652 / premises = 35,789) • HIGH VALUE DEALERS (HVDs) • TRUST AND COMPANY SERVICE PROVIDERS (TCSPs) • ACCOUNTANCY SERVICE PROVIDERS(ASPs)

  4. Our supervisory approach Those who try to Those who do not take Persistent and or serious non compliance comply butmake Those that get it right mistakes sufficient care SUPPORT HELPCORRECTINVESTIGATE EDUCATEPENALISE/DE-REGISTERPROSECUTE Resource to Risk

  5. How we decide who is risky • We consider 7 risk areas • Type of customer • Product/transactions • Channel - levels of cash remittances • Geography - corridors used • Past compliant behaviour • Intelligence • ‘Fit & Proper’ indicators

  6. What money transmitters must do • register before commence trading and pay fees of £120 per premises – then annually (bank a/c not necessary) • have policies and procedures in place that prevent the business being used for money laundering or terrorist financing and Beneficial Owners and Responsible Officers must pass the Fit and Proper Test - £50 per relevant person

  7. Your risk-based approach • We expect your policies and procedures to tackle risk in these areas • type of Customer • product/transactions • channel (how) for example the levels of cash • geography (where) - corridors used We cannot give you a list of things to tick off You know most about your customers and their transactions so you have to decide the risk X

  8. What money transmitters must do Undertake Customer Due Diligence (CDD) • identifying the customer and verifying their identity • identifying and verifying (where needed) the beneficial owner involved in a business transaction • establishing the purpose and nature of the business relationship • i Identify and report knowledge or suspicion of money laundering and terrorist financing to SOCA

  9. Who to contact? • Our website gives instructions and links • on how to make a suspicious activity reports to SOCA • how to contact the Customs hotline – use this to tell us if you think other money transmitters are not playing fair • to the police

  10. Our education activity • We engage with new and existing businesses to help them register at the right time and remain compliant • Our ‘One to Many’ activities have included: • attending Business Advice Open Days • providing Presentations to Trade Bodies & Forums • presenting at SOCA Conferences • delivering Technical Workshops to our registered businesses • raising awareness of our other HMRC colleagues Helping you get it right

  11. Our compliance activity • In 2009 we • issued 12 registration warning letters and 5 penalties • contacted 1274 businesses by phone • rejected 63 ‘Fit and Proper’ applications • made 15 suspicious activity reports ourselves and in June – December 2009 we • made 833 visits and carried out 30 desk audits leading to 175 warning letters, 4 penalties and several suspicious activity reports we made ourselves • We have also been involved in a number of cases where premises were raided, seizures made and criminals prosecuted

  12. The future • MLR8 has been separated into versions for different types of businesses and includes guidance on directions under the Counter-Terrorism Act - publication Spring 2010 • one of our priorities in 2010 will be to ensure our businesses report suspicious activity - it is your responsibility • we are working with law enforcement in HMRC to develop some cases for prosecution • we are following up our Fee Review – looking at whether we can • charge the fee on risk/amount of work • collect annual information to target visits and other work better

  13. Working with you and sharing Our education events continue and we will attend MTA conferences whenever possible We are working on a monthly information package to share with you online, so you can see how we are using your fees We will involve MTA in any development work coming out of the Fee Review and in writing customer guidance where it relates to money transmitters

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