MLR1PP15001 - New Financial Penalties Framework

From 1 April 2020, the way in which financial penalties are calculated will be changing.

Financial Penalties are just one of the options available to respond to compliance failures. The correct response should be determined in accordance with the sanctions framework. A Financial Penalty may be applied as a stand-alone sanction or as part of a suite of measures designed to remedy the compliance failing.

The new framework categorises financial penalties into four types:

• Type 1 (compliance breaches - benefits gained) see MLR1PP16000
• Type 1 (compliance breaches - scale charge)
• Type 2 (registration breaches - i.e. carrying out relevant activity whilst unregistered)
• Type 3 (failure to notify AMLS of relevant information and/or changes to relevant information)
• Type 4 (failure to provide information or access to business premises)

When issuing any of the penalties, the deciding officer must ensure that any penalty is ‘effective, proportionate and dissuasive’. If the deciding officer thinks that a financial penalty does not achieve all these requirements, consideration should be made to going ‘off framework’.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

All penalties issued will also include an administration charge which will vary depending upon the type of penalty. Further details relating to administration charges can be found on GOV.UK.