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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: the range of warnings, penalties and sanctions available to us

The types of sanctions available to us are:

  • warning letters. These will explain what action is needed by the business to become fully compliant with the Regulations. Normally only one warning letter will be issued and only when a first and a minor failing or breach of the Regulations, has been identified. This will give the business the opportunity to demonstrate to us that it has taken the reasonable steps we have suggested to become compliant before we issue a penalty. Warning letters will not be appropriate where serious or persistent failures of the regulations are identified.
  • a penalty followed by further increased penalties if non-compliance continues followed by publication of the details
  • withdrawing fit and proper status for specific individuals trading as Money Service Businesses (MSBs) and Trust or Company Service Providers (TCSPs). This will mean that they will not be able to occupy any position in any business where there is a requirement to pass the fit and proper test.
  • withdrawing approval where a person is convicted of a relevant offence and is an Estate Agency Business (EAB), High Value Dealer (HVD)  and Accountancy Service Provider (ASP)
  • prohibiting a person from managing
  • suspension or cancellation of a businesses registration because:
    • the relevant person in the business is now considered to be not fit and proper, and so their fit and proper status has been withdrawn or they are no longer approved by HMRC
    • after registration, it is found that the business is no longer able to meet the conditions for registration. or has provided false or misleading information
    • the business has failed to pay a penalty or fees
    • the business  or any person has failed to comply with their obligations
    • the business has failed to provide HMRC with information it has requested by notice.
  • a criminal investigation and prosecution leading to a sanction imposed by the courts, which could include a fine, community service or a prison sentence.