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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: the MLR penalty process: overview: Compliance Penalties Part 1 MSBs/HVDs

The additional penalty is calculated differently for Money Service Businesses/High Value Dealers (MSBs/HVDs) and Trust or Company Service Providers/Accountancy Service Providers/Estate Agency Businesses (TCSPs/ASPs/EABs). This is because of the different vulnerabilities to money laundering which are likely to arise within these business sectors as a result of any regulatory breaches.

Breaches by MSBs/HVDs mean that their actual business income or turnover will potentially include proceeds of crime, which may have been successfully laundered through their business when the Regulations are not correctly applied.

The level of the additional penalty for MSBs and HVDs is therefore based on the turnover which may have been exposed to money laundering when they have breached the Regulations. We call this the ‘Culpable Turnover’. For an MSB this may be the value of the money transmitted, or for a HVD, the value of the goods sold, during the ‘relevant period’. The additional penalty is 20% of this amount.