ECSH81085 - Sanctions administration charges for multiple sanction types
A decision maker (DM) may encounter a situation where multiple sanction types are to be imposed on the same business/individual. Multiple sanction types will affect how a DM issues the sanction notices and applies the sanctions administration charge (SAC).
Issuing sanction notices
The DM must issue a separate sanction notice for each sanction type. This allows the business/individual to respond and make representations to each sanction notice independently. This is important if the business/individual for example, accepts a penalty notice and wants to pay promptly, to obtain an early payment reduction, but appeals another sanction type.
Applying the SAC
When multiple sanction types are imposed because of a compliance intervention then only a single SAC is applied.
Details of the SAC for each type of sanction can be found here.
For example, if a compliance officer issues a type 1 penalty for £5,000 with a £2,000 SAC and in addition a prohibition on management is imposed with a £2,000 SAC, then only a single £2,000 SAC is applied to the type 1 penalty notice.
However, if multiple sanctions are imposed, as a result of a type 4 request for information penalty , then a SAC is applied to each instance. However, the later SAC is reduced so the effect is that only one SAC is applied.
For example, at the annual refresh, updated registration information is not forthcoming, so a notice under regulation 66 of The Money Laundering, Terrorist Financing and Information on the Payer (Transfer of Funds) Regulations 2017 (MLR 2017) is issued. The business/individual fails to comply with the notice, so a £1,000 penalty is imposed with a £350 SAC. If this penalty results in the required information being received, but the information indicates a material change has not been notified, then a £2,500 type 3 penalty is imposed attracting an additional £350 SAC. However, this type 3 SAC would not be charged, because a type 4 £350 SAC has already been imposed. This is explained further below.
Exceptions
When a business registration is suspended from the register then a £2,000 SAC is applied. If the business is later cancelled and the grounds for cancellation remain unchanged from the suspension, then a further SAC is not applied. However, if there are additional grounds to cancel the registration, involving additional resource, a further SAC is applied. This principle is also applied if a suspension period is extended and the grounds for extending the suspension remain unchanged.
Where a notice under regulation 66 has been issued, and the business/individual fails to comply with the notice, a type 4 penalty is imposed. The SAC of £350 is applied in all cases on the initial penalty of £1,000. If a further type 4 daily penalty for continued failure is imposed, then a further SAC is not applied.
If this type 4 penalty results in the information being received, which in turn, results in another penalty type, then the DM only charges the difference, if greater, between the additional penalty type SAC and the type 4 (£50) SAC. So, for instance, if the information results in a £5,000 type1 penalty then a £2,000 SAC would normally be due. However, because a £350 SAC had already been applied to the type 4 penalty, then the type 1 SAC would be reduced by the £350 already charged. (£2,000 less £350 = £1,650).