Money laundering supervision: introduction
Find out who the Money Laundering Regulations apply to and what they mean for your business.
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.
This guide will help you decide whether the regulations apply to your business and understand your responsibilities if they do.
Who the regulations apply to
The regulations apply to a number of different business sectors, including financial and credit businesses, accountants and estate agents.
Every business 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.
If not, and your business falls into one of 7 business sectors, you’ll need to register with HM Revenue and Customs (HMRC).
You can check if you need to register first.
HMRC supervises the following 7 business sectors:
- high value dealers
- trust or company service providers
- accountancy service providers
- estate agency businesses
- money service businesses
- bill payment service providers
- telecommunication, digital and IT payment service providers
Anti money laundering controls and monitoring
You must put in place certain controls to prevent your business from being used for money laundering if you’re covered by the regulations. These include:
- assessing the risk of your business being used by criminals to launder money
- checking the identity of your customers
- checking the identity of ‘beneficial owners’ of corporate bodies and partnerships
- monitoring your customers’ business activities and reporting anything suspicious to the National Crime Agency (NCA)
- making sure you have the necessary management control systems in place
- keeping all documents that relate to financial transactions, the identity of your customers, risk assessment and management procedures and processes
- making sure that your employees are aware of the regulations and have had the necessary training
Reporting suspicious activity
You need to appoint a nominated officer (sometimes called the money laundering reporting officer) as part of the anti money laundering controls that you have to put in place.
You don’t need to appoint a nominated officer if your business doesn’t have any employees, because you’re the person who is directly responsible for informing the NCA.
Your nominated officer must be told if anyone in your business knows or suspects that another person is laundering money or financing terrorism.
The nominated officer then has to review the information they have received and decide if it needs to be reported to the NCA.
Published: 23 October 2014
Updated: 26 June 2017
- This guidance has been updated to reflect legislation changes effective from 26 June 2017, including adding 2 further business sectors that are now supervised by HMRC. These are 'bill payment service providers' and 'telecommunication, digital and IT payment service providers'.
- First published.