ECSH10500 - Data Protection Act 2018/General Data Protection Regulation: introduction
Regulation 85 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payers) Regulations (MLR 2017) requires HMRC to publish the details of civil sanctions issued to relevant persons “without undue delay” on GOV.UK. There are some exceptions to this:
HMRC must not publish, anonymously or otherwise, where the stability of the financial markets or an ongoing investigation would be in jeopardy.
HMRC must defer publication where publishing the details would be disproportionate. Full details would be published at a later point where we consider that publication would be proportionate.
There is no definition of what is “disproportionate”. Decision makers can refer to ECSH101000 under consideration of proportionality to assist in decision making.
Whilst the factors above apply to a prohibition on management sanction, the bar for anonymous publication is far higher. Not publishing full details of the individual concerned effectively undermines the sanction.
The sanction administration charge should not be published and therefore is not to be included in the penalty amount which is published.
Anonymous publication
HMRC must publish in full, unless by exception, where publishing the personal data of an individual (“identified or identifiable living individual”) would be ‘disproportionate’.
Exceptional circumstances supporting anonymous publication are:
Any penalty resulted from official error. For example, HMRC officials making decisions contrary to MLR 2017, and/or if HMRC published guidance provided erroneous information to a business.
‘Minor’ penalties – meaning a penalty below £2,000 and not deliberate will only be published in aggregate. Note, penalties of any amount issued because of non-compliance with regulation 66 MLR 2017 are considered deliberate, so not minor.
These are not exhaustive. It may be appropriate to publish anonymously in other scenarios - See ECSH101000.
Suspensions and cancellations
In addition to publishing details of penalties, censure statements and prohibitions on management, under regulation 60(11) MLR 2017, HMRC may publish details of the suspensions and cancellations of registrations. Unless deemed disproportionate, HMRC will publish the grounds for the decision and at least one sentence detailing the reason(s) for the decision.
Details will be published in full where the cancellation of registration is due to unpaid fees, unless it would be disproportionate to do so.
If a business is trading whilst unregistered after its registration was cancelled, this is an aggravating circumstance supporting full publication of the cancellation.
‘Administrative’ type cancellations are not published. These can include:
Applicant deceased.
Ceased trading.
Out of scope.
Registration no longer required.
Supervised elsewhere.
Unable to withdraw.
Wrong information on form.
Refusal to register
If HMRC refuse to register a business, regulation 59(6)(a) MLR 2017 allows HMRC to publish this decision unless disproportionate to do so. These will be published unless there are significant mitigating circumstances against doing so.
If a business has been trading whilst unregistered prior to, or after, being refused to register, these are aggravating circumstances supporting full publication of HMRC’s refusal to register the business in question.
Adverse fit and proper findings
If the basis for a sanction is partly due to adverse fit and proper (F&P) finding, sanctions should be published in full to mitigate the possibilities of phoenixing and/or other forms of future non-compliance by the business and/or beneficial owners, officers, or managers (BOOMs) of the business. When this occurs, HMRC does not have the power to mention adverse F&P findings in the publishing details of the non-compliant (PDNC).
Appeals and Reviews
PDNC is not a sanction and there is no right to a review or appeal of HMRC’s decision to publish this information. HMRC will not accept any arguments from penalised businesses that their share prices and/or profits would decline because of penalties being published unless the businesses being penalised could successfully argue that numerous other companies, FTSE indices and/or any other recognised and wide-scale UK financial markets would be at significant and wide-ranging risk by publishing any penalties in question in full.
General reputational or financial harm of any penalised business is not sufficient to justify anonymous publication because financial penalties and publication thereof are meant to have deterrent effects to prevent non-compliance and improve compliance with MLR 2017.
Only the underlying decisions which are being published, being the penalty, prohibition on management, censure statement, suspension or cancellation, can all be subject to an independent review or appeal.
Where the business or individual on which the decision has been made, has requested an internal review prior to publication of the sanction, HMRC won’t publish the details until an outcome of the review has been reached. If the conclusion was to uphold, in whole or in part, the sanction, the details will be published once the review conclusion has been reached.
Where a late review is requested (outside the 30-day timeframe), it is possible that the details will have already been published on GOV.UK. In this instance no further action will be taken, and the details will remain on GOV.UK until we know the outcome of the review.
Where an appeal is late (received after the 30-day timeframe), the penalty decision may already have been published on GOV.UK. In this instance GOV.UK will only be updated to say that an appeal has been received, once it has been accepted by the Tribunal. Further guidance on this provided here.
Where an appeal is received and accepted by the Tribunal, HMRC will publish the appeal/review status on GOV.UK, stating that an appeal or request for review has been received. Where an appeal is successful, HMRC will amend this note to “appeal successful”. Where the appeal is unsuccessful, the note should say that “HMRC sanctions upheld at appeal”.
Publication
Two weeks before publication, all supervised persons are informed that we intend to publish the next round of PDNC on GOV.UK via email. All persons who have made representation against publication are sent a letter with the decision.
HMRC aim to publish penalties quarterly, and cancellations and suspensions of registration fortnightly. These pages are regularly updated with any relevant changes (for example, appeal outcomes).
Where a decision has been made to publish anonymously, the Promote Team will add the following information to GOV.UK, in liaison with communications colleagues:
Type of penalty – registration or compliance.
The supervised sector that the registered business is part of.
The nature of the breach (Regulation number and description) and value.
Appeal status.