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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: interconnections between the Regulations

When considering if the Regulations have been breached the specific requirements demanded by each regulation must not be seen in isolation.

Some of the requirements are very specific, such as the requirement to train staff, while others such as the customer due diligence requirements, are closely linked to each other. When a breach of one of these related Regulations occurs, it is highly likely that the failing will have breached another related regulation. For example, a breach of Regulation 24 is likely to result in a failure to correctly apply risk-sensitive customer due diligence by staff who have not been trained. These connections are also underpinned by the connection between the individual Regulations and the risk assessment and policy requirements in Regulation 18 and 19.

Where related breaches have been identified it is recommended that a single penalty should be calculated for all the related breaches.  A multiple breach approach should be taken where the failures fall within a number of groups of related breaches.

For MSBs there may also be a relationship between breaches of both the MLR and Transfer of Funds Regulations, for example, failing to keep records.

If there is any pre 2017 element to a breach of the regulations, officers should follow the interim guidance.