AMLG2600 - Sector Specific Guidance: High Value Dealer Guidance
1. Who is this guidance for
This guidance should be read in addition to Parts 1 and 3. The following applies to High Value Dealers (HVDs) under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (referred to as the Regulations in this guidance).
We use the term “illicit finance” in this guidance to mean money laundering, proliferation financing and the financing of terrorism.
2.HVD Definition
An HVD is defined in the Regulations under Regulation 14(1)a.
“High Value Dealer” means a firm or sole trader who by way of business trades in goods (see section 4 below) (including an auctioneer dealing in goods), when the trader makes or receives, in respect of any transaction, a payment or payments in cash of at least £10,000 in total, whether the transaction is executed in a single operation or in several operations which appear to be linked;
A payment in cash will also include when a customer, or someone acting on their behalf, deposits cash directly into your bank account or pays cash to a third party for your benefit. (as per Regulation 14(2)).
Cash means notes, coins, or travellers’ cheques, in any currency.
HMRC considers that the following cash payments would meet the £10,000 HVD threshold:
A single cash payment of £10,000 or more.
Several cash payments in linked transactions totalling £10,000 or more, including a series of payments and/or payments on account.
HMRC considers multiple cash payments against a single invoice to be linked transactions, regardless of how long it takes to make this payment. For example, if a customer pays monthly instalments in cash against the cost of a car sold for £10,000 or more.
Cash payments totalling £10,000 or more, which are linked, but appear to have been deliberately broken down into smaller amounts so that they come below the relevant cash payment threshold.
For example, a customer pays for two pallets of goods in cash each costing £5,000 making a total sale of £10,000. Normal business practice would be for both pallets of goods to be on one invoice. However, the transaction is deliberately split into two invoices for £5,000 each, in order to appear below the HVD threshold, although the total cash paid is still £10,000.
Important Note: Payment made for services is not HVD activity.
Where a payment is made for a combination of goods and services the transaction is only within scope of the Regulations if the goods meet the threshold of £10,000 and are paid for in cash.
For example: a bathroom fitter invoices a customer for a total of £17,000, where the bathroom fixtures (goods) cost £12,000, and labour and fitting (services) is £5,000. If the customer pays for the bathroom fixtures in cash, this is HVD activity and the bathroom fitter would need to register.
A bathroom fitter invoices a customer for a total of £17,000, where the bathroom fixtures (goods) cost £9,000, and labour and fitting (services) is £8,000. Regardless of whether the invoice is paid in cash, this is not HVD activity, as the goods are below the threshold.
3. HVDs carrying out financial activity
During the course of business, an HVD may carry out financial activity on an occasional or limited basis. The financial activity only applies to cheque cashing or currency. If the criteria set out below is met, Regulation 15 removes the obligation under the Regulations for the HVD to register and be supervised for that financial activity.
This exclusion only applies to the financial activity, and you would still need to register and comply with the regulations in respect of your HVD activity.
The financial activity (currency exchange or cheque cashing) excluded under Regulation 15 must meet the following criteria:
Must not be the transmission or remittance of money (or any representation of monetary value).
Must not be more than £100,000 per year and be no more than 5% of the total annual turnover of your business.
Must be ancillary, that is only be with your customers, it must not be available to the general public and must be directly related to the main business.
Your main business activity is not that of a sector supervised by HMRC, other than high value dealers.
Transactions worth more than 1,000 euros are limited to 1 per customer (this could be a single transaction or a series of smaller transactions that seem to be linked).
4. Goods
Goods are not defined in the Regulations so HMRC have adopted the dictionary definition of goods as ‘things that can be bought and sold, moved across borders and converted into cash’.
Examples of goods include, but are not limited to, the following:
Alcohol
Caravans, motorhomes and static vans
Cars
Electronic goods
Food
Jewellery
Textiles and Clothing
Works of Art
Where a work of art which is sold by the business for £10,000 or more in cash, the business is both an HVD and Art Market Participant (AMP) and will need to register for both sectors.
Goods do not include land or buildings as they cannot be transported across borders. A business selling land or buildings may be acting as an estate agent business (EAB) and if so, it must register with HMRC. However, the materials used for building are goods.
For more information regarding registration, refer to AMLG1500 and for Estate Agent Business’s refer to AMLG2200.
Goods do not include gift cards, as these are classified as e-money.
5. National Risk Assessment (NRA)
The NRA assesses the risk of money laundering through HVDs to be medium and the risk of terrorist financing through HVDs is assessed to be low.
Please read the NRA for further information on risks for HVDs.
The NRA is a central part of the UK’s ‘risk-based approach’ to countering money laundering and terrorist financing.
The NRA sits alongside UK system prioritisation which aims to publish a list of economic crime priorities to inform public-private resource. These are intended to support participating parts of the regulated sector to effectively allocate their internal resources on a cost-neutral basis while maintaining their regulatory responsibilities.
Typologies in the NRA should be read in conjunction with the priorities published by the NECC & FCA under System Prioritisation.
These priorities are intended to provide context to the risks in the NRA will provide more detail on the priority areas some sectors should note for certain typologies. The priorities are expected to be reviewed annually as well as on publication of a new NRA. When the priorities are published guidance will be provided on how to relate these to each NRA typology.
You should take account of the system priorities and pay particular attention to anything which might fall into one of the priority categories, making a meaningful SAR where possible, given these activities are of key interest to law enforcement.
To understand the specific risks you, as an HVD, face for money laundering, terrorist financing and proliferation financing, please see Part 3 of this guidance.
Important Note: Cash is assessed as high risk for money laundering because of the anonymity around this, the one-off nature of many transactions and the ease of carrying high value goods across borders. Cash intensive businesses may also be used to clean money. Cash is also assessed as high risk for terrorist financing.
6. National Risk Assessment of Proliferation Financing
For more general information on proliferation financing, please see Part 1 of this guidance.
You must be aware of proliferation financing (PF) and assess the risk their business faces from PF in their risk assessment, training, and PCPs. Whilst the National Risk Assessment of Proliferation Financing does not mention HVDs specifically, HVDs must be aware of the risks associated with certain goods, and in particular on dual-use goods.
The Department for Business and Trade published a list of dual-use goods, including those of use in Weapons of Mass Destruction (WMD) programmes. This includes finished products and raw materials.
There is a risk of goods sold by an HVD being used for WMD development, including indirectly through their onward sale to finance WMD development.
Any business or individual involved in a transaction for, or linked to, dual-use items would be higher risk, especially those also linked to regimes sanctioned for proliferation financing. Use of unclear company structures trusts, and intermediary jurisdictions would also indicate a higher risk in such a transaction or series of transactions.
You should specifically be aware of the higher risk of PF from transactions involving individuals or businesses that could be linked to PF, for example from, Democratic Peoples Republic of Korea (DPRK) Russia, Syria and Iran.
Dual-use machinery using routes via UAE and Turkey are particularly at risk of being diverted to regimes which are subject to PF Sanctions.
Direct procurement of dual-use items in a PF context typically involves a procurement network seeking to export controlled items out of the UK to a high-risk jurisdiction.
The case study below relates to an HVD who was also an auctioneer.
As an auctioneer, the UK seller may carry out checks prior to the admission of bidders, but usually to ensure they are able to pay for the items rather than to carry out Counter Proliferation related checks.
The amounts involved are usually low and therefore do not routinely arouse suspicions from the sellers’ bank, and likewise for the buyer’s bank. Due to UK, EU and US sanctions, not all Iranian banks have banking relationships with Western banks, so the Iranian buyer explained away third country payments from the UAE or Turkey.
As the payer may be a local entity, the real Iranian purchaser was never revealed. As the buyer organises the freight movement independently, the usual routing is through Turkey or the UAE.
The former for ease of movement of items from the UK and a land border to Iran, and the latter as a Freeport / free trade zone in the heart of the Middle East. Furthermore, as the items are declared as being consigned for local entities, the real end user is not declared.
lease see the National Risk Assessment of Proliferation Financing and Part 3 of this guidance for more specific information on proliferation financing risks for HVDs.
7. How can HVDs be used for Illicit Finance?
Money laundering & terrorist financing can take many forms, but for you as an HVD it can involve:
Exchanging cash for high value items that can be easily transferred and sold on, sometimes at a loss, such as jewellery or vehicles.
Exchanging cash for large quantities of lower value items that can be sold onwards easily such as alcohol.
Exchanging cash for high value assets that are then returned and clean cash refunded.
Certain types of goods may be more attractive to criminals than others. HVDs must carefully consider why a customer wishes to make payments in cash rather than paying via a bank account. Goods which are considered higher risk are set out in Regulation 33(6)(b)(vii).
For an HVD goods are considered higher risk if a customer pays in excess of £10,000 in cash for the purchase.
8. Registration & Approvals Checks
You must not trade as an HVD until you have applied to register with HMRC. Please see AMLG1500 for more information on registration.
HVDs are subject to approval checks by HMRC. HVDs that have applied for registration may carry on HVD activity whilst their application is being determined.
Please see AMLG1600 for more information on the approvals check. A business or sole trader which does not usually carry out HVD activity, and is therefore not registered with HMRC, may unexpectedly carry out a cash transaction above the HVD threshold of £10,000. For example, an auction house may achieve a higher price than expected for the sale of goods. In this scenario, the business or sole trader must register with HMRC immediately after that sale has occurred and comply with the Regulations, including conducting CDD on any sale over the HVD threshold before completing the transaction.
9. Linked Transactions
The £10,000 threshold applies to linked transactions totalling £10,000 or more where the transaction appears to be deliberately broken down into several payments below £10,000.
This is discussed above in section 2.
You must assess the risk of your customers and transactions, and the goods sold within them, and ensure that you have adequate controls in place in order to spot and risk assess linked transactions, particularly if it appears that a customer is breaking up transactions to circumvent the HVD threshold.
10. Customer Due Diligence
Customer due diligence requirements are discussed in detail in AMLG11300.
Customer due diligence must be carried out on all customers, even if you knew them before they became your customers. This is because you must be able to show that you have verified the identity of all your customers and have assessed the purpose of the transactions or relationship, including the reasons for paying in cash.
11. Who is your customer?
A customer for the purposes of the regulations as an HVD for which you must apply CDD is:
The individual or business from whom you are receiving a relevant cash payment of £10,000 or more (or the equivalent in any currency).
The individual or business to whom you make a relevant cash payment of £10,000 or more (or the equivalent in any currency).
Another party if they are acting as a supplier and are involved in the transaction and are receiving the payment.
Accepting payments from cash couriers, intermediaries or persons that pay for goods overseas through a cash deposit into the business’s account.
The business could also have cash payments made into their accounts by unknown third parties who receive instructions from informal value transfer systems (IVTS) operators.
More information on IVTS can be found in the NRA and AMLG2400.
12. Timing of CDD
Customer Due Diligence CDD must be undertaken when:
Establishing a business relationship with your customer.
Concluding an occasional transaction with your customer valued at £10,000 or more (in a single operation or in several operations which appear to be linked) – whether you are making or receiving the payment.
Receiving cash payments for payments on account or accumulated debts from a customer.
You suspect money laundering or terrorist financing in any transaction, regardless of value.
Information obtained for due diligence checks on a customer is suspected of not being reliable or adequate.
13. Business Relationships
A business relationship is a business, professional or commercial relationship between a business and a customer, which the business expects, on establishing the contact, to have an element of duration.
For example, a business relationship exists where any of the following apply:
Another person or business is your customer and there is an expectation of repeat or ongoing business and/or transactions.
There's a contract to provide regular services.
You give preferential rates to repeat customers.
Any arrangement that facilitates an ongoing business relationship or repeat custom, such as providing a unique customer identification number for the customer to use and or setting up a customer account.
If your customer asked you to provide multiple goods over a period of time or sets up regular recurring invoices all of which are over £10,000 threshold.
For more information on business relationships, see AMLG11300. This include specific instances where a business relationship is established.
Where there is no obligation or commitment on the customer to use your services or buy goods from you again, this is likely to be an occasional transaction rather a business relationship.
You will therefore need to carefully consider which customers, you have a business relationship, and which customers you will have an occasional transaction with. In relation to such customers, you are required to keep customer information up to date and you should be alert to changes which may trigger a change to a business relationship.
There are some additional obligations under the Regulations in relation to customers with whom you have a business relationship, see AMLG11411.
14. Source Of Wealth and Source of Funds
As an HVD there may be occasions when you need to establish your customer’s Source of Wealth and Source of Funds.
Source of funds and source of wealth are discussed in detail in AMLG11630.
Verifying your customer’s source of funds and wealth would be required when conducting enhanced due diligence (EDD).
Where you customer is a politically exposed person (PEP)
When your customer is from a FATF Call for Action country.
Source of funds and wealth verification would be required for all the customers, and the customers beneficial owner involved in the transaction.
Record keeping and documentation of your decision making with regards to source of funds and wealth checks must be retained in order to allow the transaction to be reconstructed, in line with your obligations under Regulation 40 (see record keeping below).
15. Record Keeping
As an HVD you must keep records as stated in Regulation 40(1) to satisfy your CDD requirement. See AMLG11700.
Records will include:
VAT Invoices
Sales Invoices
Purchase Invoices
Freight documentation
Bank Statements
Delivery Notes
Important Note: If the cash is paid by a third party, you must keep documents such as instructions regarding making the cash payments.
16. POCA (Proceeds of Crime Act) and TACT (Terrorism Act)
To comply with POCA 2002 Obligations, it your responsibility as an HVD to conduct due diligence on your customer(s) and to ensure that there is no suspicion of Money Laundering in the transactions conducted by all parties.
You have continuing obligations under POCA (and additional obligations because the HVD is in the regulated sector) to ensure that you neither know or suspect, nor have reasonable grounds for knowing or suspecting, that you are handling or facilitating a sale which itself represents the proceeds of crime.
To meet your POCA obligations, therefore, it may be appropriate (as determined on a risk-based approach) for you to carry out further checks on the seller to ensure that you are not handling stolen goods or otherwise facilitating use of the proceeds of crime.
There are also similar obligations under TACT, which will require you to carry out further checks on the parties in a transaction, to ensure that you are not facilitating terrorist financing. See AMLG1100 for more information.
Both POCA and TACT obligations apply to transactions even when they are below the HVD threshold.
17. Financial and Trade Sanctions
For further information on financial and trade sanctions see AMLG1100, section 1.7 and 1.8.
Trade and Financial Sanctions can be broken down into two requirements:
Requirements to not breach financial and trade sanctions.
Reporting requirements.
Russia
You must be aware and comply with The Russia (Sanctions) (EU Exit) Regulations 2019, in particular Chapter 46B which impose a number of restrictions on the export, supply, technical assistance and brokering of the supply of luxury goods to Russia, persons connected with Russia, or make available for use in Russia.
There is no threshold value for trade sanctions, so HVDs will need to conduct due diligence on all customers (both buyer and sellers) for all transactions, regardless of the value, for goods listed within The Russia (Sanctions) (EU Exit) Regulations 2019 which can be accessed here.
Financial sanctions reporting requirements
From 14 May 2025, HVDs were added to the list of ‘relevant firms’ subject to financial sanctions reporting requirements. You can find information regarding OFSI and their Art Market Participant and High Value Threat Assessment here.
Relevant firms (as defined in the UK regulations under the Sanctions and Anti-Money Laundering Act 2018) are required to inform OFSI as soon as practicable if they know or have reasonable cause to suspect a person:
Is a designated person (DP) or,
Has committed a breach or failed to comply with an obligation under the UK regulations.
You can report information to OFSI here.
A full consolidated list of designed persons for financial sanctions can be found here.
OTSI produce guidance on trade sanctions available here.
18. Further Sources of Guidance
The Financial Action Task Force (FATF) has published detailed guidance on the Risk Based Approach for Dealers in Precious Metals and Stones.