ECSH82000 - Sanctions for non-compliance: warning letters
Introduction
Warning letters can be used to address minor non-compliance by the business with their obligations under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). Although there is no explicit power within MLR 2017 to issue a warning letter, as a matter of policy they can be used where the non-compliance is considered to be such a minor contravention of MLR 2017, that formal sanction(s) would not be an appropriate response to the non-compliance identified. For more information on assessing the appropriateness of a sanction please see ECSH85650. When deciding whether to issue a warning letter consideration should be given to the risk(s) posed by the contravention identified. Warning letters may be appropriate for first-time minor contraventions of MLR 2017. Minor contraventions would be those that did not lead to an increased risk of money laundering, terrorist financing or proliferation financing (ML/TF/PF).
If the decision maker (DM) considers the contraventions identified and/or the risks are not minor, a warning letter must not be used.
Warning letters are designed to promote a positive behavioural change and to ensure that minor non-compliance is acknowledged and addressed within an appropriate timescale. Therefore, the warning letter will outline what steps the business needs to take to address the contraventions identified and the timeframe for dealing with them. It must also specify the relevant period of the breaches(s) covered by the warning letter, see ECSH 82850. Where contraventions have been identified an advice letter must not be issued.
If a business has previously received a warning letter and a further intervention identifies the business is still non-compliant with its obligations under MLR 2017 a further warning letter would not normally be an appropriate response to the non-compliance and a sanction should be considered.
A warning letter is not a sanction of itself.