MLR1PP15100 - Type 3 penalties (failure to notify AMLS of relevant information and/or changes to relevant information)
Type 3 penalties relate to businesses who have not informed HMRC of relevant changes that they are required to inform HMRC of or, alternatively, where the business did not provide the relevant information that is required from them during their application for registration.
The information that businesses may have failed to supply HMRC with can be categorised under three headings:
- failure to notify material changes and/or inaccuracies to information provided
- failure to notify change of beneficial owners, officers or managers and/or inaccuracies
- failure to notify prohibitions (if not considering criminal investigation).
If a business has knowingly provided false or misleading information, other sanctions may be more appropriate than a penalty. Details of other sanctions that can be issued can be found at Civil Measures for money laundering supervision on GOV.UK.
Failure to notify of material changes and/or inaccuracies relates to all relevant information a business is required to inform HMRC of. This excludes changes to compliance officer and nominated officer, this is explained further below.
Failure to notify material changes and/or inaccuracies will result in a £2,500 penalty per breach. If a business provides an unprompted disclosure in relation to failure to notify of material changes and/or inaccuracies, the business will be eligible for a 50% penalty reduction.
Example – A business does not inform HMRC of two additional premises and is therefore charged £5,000. The two premises were identified during an HMRC intervention and so this was not an unprompted disclosure. The business is not eligible for a 50% reduction.
Failure to notify change of nominated officer and compliance officer and/or inaccuracies will result in a £5,000 penalty per breach. If a business provides an unprompted disclosure in relation to failure to notify change of nominated officer and compliance officer and/or inaccuracies, the business will be eligible for a 50% penalty reduction.
The Regulations prohibit relevant businesses from having beneficial owners, officers or managers that have unspent convictions, listed within Schedule 3 of the Regulations Failure to notify of prohibitions (if not considering criminal investigation) is considered the most severe category for Type 3 penalties. It therefore has the highest value of penalty per breach, £10,000. Due to the severity of the breach, there is no reduction available for an unprompted disclosure.
Type 3 penalties also attract a 25% discount where the payment is paid within 30 days of the penalty notice being issued. See MLR1PP15010
This penalty framework is set out in MLR1PP15111