ECSH64420 - Regulation 83 - The Commissioners: disciplinary measures (procedure)

Category Heading	Description
The Law	https://www.legislation.gov.uk/uksi/2017/692/regulation/83
What it means	Sets out what steps and considerations the HMRC must take when deciding the type of sanction and level of penalty to raise under regulation 76 or 78. Your current Interventions Outcome Checklist (IOC) document (or new Decision and Evidence Log (DEL)) / decision record follows the requirements of Reg 83.
Purpose	To ensure that HMRC have taken account of all relevant circumstances prior to raising a sanction under regulation 76 or 78, and that all administrative procedures are followed.
Time Line	There is no comparable regulation in either the 2007 MLRs or 2003 MLRs.
What to establish	Have you checked whether the intended recipient has any criminal convictions that may be relevant when determining the type of sanction/level of penalty to be imposed under regulation 76 or 78? This can be done by completing an R83 referral template. We must consider all of the below factors of 83(1) where appropriate: a. the severity of the failure and how long it has been going on b. the degree of responsibility of the person/business c. the financial strength of the person/business d. the gain to the person/business by not complying with the regulations e. the potential losses for third parties caused by the failure(s) f. the level of co-operation you have received g. previous failures by the person/business, as detailed in any previous Interventions h. Is the breach fundamental in nature (effecting the business as a whole)? Or is it localised (only effecting part of the business)? Have you discussed the proposed sanction with your team leader? When imposing a sanction (penalty or publishing a statement (regulation 76) or imposing a prohibition (regulation 78)), a notice must be given to the person/business. This notice must include: what sanction we are imposing reasons for imposing the sanction right to review (regulation 94) right to appeal (regulation 99) Where the sanction is a penalty, we must also include: how, where and when the penalty is to be paid the recovery of unpaid penalties
How to test compliance & Evidence to obtain	Use the relevant departmental systems to investigate the person’s compliance history (e.g. ETMP, RCM, Caseflow, check historic cases on MICRA/DTR) Use the information provided by the Risk team to help assess the person’s behaviour Use Caseflow to clearly record interactions with the person and reasons for decisions Clearly identify the period in which the contravention/failure took place Obtain financial records that detail the persons financial position (e.g. Annual Accounts)
Best Practice	The areas we must consider, stated above in section “What to establish” should be recorded in your IOC/DEL or other audit trail documentation (e.g. decision record), so that if we are challenged on the type and level of sanction, we can demonstrate that we have considered all of the areas listed. The IOC/DEL is a living document and should be completed throughout your case. All cases opened from 16/08/2021 / All interventions commenced from 16/08/2021 will now be using a  new reporting template, replacing the Intervention Outcome Checklist. The new template is to be known as the Decision and Evidence Log (DEL). The new template will be a more thorough step by step process, assisting you in all decisions that you make within your cases. Consider on a case-by-case basis, the business as a whole and whether the proposed sanction(s) is appropriate to the size of the business, types of breaches and risk of money laundering and terrorist financing. You need to weigh the financial viability of the business being able to pay any penalty (in discussion with your manager and (possibly) the Strategy lead).  Take into consideration the comments on a recent (2020-21) MSB large penalty, where the business is unlikely to have funds to pay the penalty. You must consider Reg 76 in the whole, but specifically Reg 76(8)(a) “appropriate means … effective, proportionate and dissuasive.” - Will the sanction be effective to the registered individual/business? - Is the sanction proportionate?  Have we considered the financial position of the business in relation to the level of financial penalty? - Will the sanction be dissuasive to the business and other similar businesses within the Sector, if published? If the penalty calculates to below £500 (not including the admin charge), we do not issue the penalty, but revert to a Warning Letter to the Business.
AMP	No additional Best Practice.
ASP	Where for example, a low-risk ASP does not have written RA/PCPs or has generic or poorly written ones, but in practice has met the requirements of the Regs, particularly with regard to CDD, if they are meeting their clients F2F, are using original documents-bank statements, tax documents with UTRs etc, then we should consider issuing a Warning Letter, as opposed to a financial sanction (i.e. a Penalty).
EAB	No additional Best Practice.
LAB	No additional Best Practice.
HVD	No additional Best Practice.
MSB	No additional Best Practice.
TCSP	No additional Best Practice.
Further Reading	Regulation 76 Regulation 78 Regulation 94 Regulation 99
FAQs