HMRC internal manual

Money Laundering Regulations: Compliance

Business sector specific Guidance: Money Service Businesses: Specific Compliance Checks at a Cheque Cashers

Records can vary depending on the type and size of the business.

However, it is usual to see the following documentation:

* customer’s ID
* mandate forms
* computerised customer account
* daily summary records
* statement from franchisor detailing cheques banked
* banking records (for example bank statements)

Potential failures/weaknesses under MLR 2007

Due to the commercial procedures in place the risk of money laundering is low.

However, there are common failures/weaknesses and these are as follows:

Regulation 20 - Documented procedures usually concentrate on the commercial risks and therefore may not meet the requirements of regulation 20.

Regulation 8 - No evidence of ongoing monitoring of a business relationship. ID not refreshed and no evidence transactions have been scrutinised.

Regulation 14 - Business may accept cheques made payable to a limited company without applying any due diligence measures.

Regulation 21 - No documentation evidencing staff have received appropriate training.

The following show what type of transactions is normally accepted. It is not a definitive list but it contains information about the types of cheque that a cheque casher will usually consider cashing or is unlikely to cash.

Acceptable Types of Cheque Drawers (company, body or person who makes out the cheque)

Private Sector Local Government Central Government
Private Limited Companies Metropolitan Boroughs HMRC
Public Limited Companies County Councils DWP
Unlimited partnerships District Councils HM Paymaster General
Individual Business Accounts Town Councils Post Office Counters
Pension Funds Agencies of the above Any Nationalised Industry
Bank or Building Society   Any Government Agency
Mutual Company of any kind   Giro Cheques (where crossed)
Benevolent Funds    

Unacceptable types of Cheque Drawers

Most cheque cashers will not be willing to accept cheques where the drawer is:

* a private individual unless they are also the payee.
* a giro cheque with an open crossing (these can be freely cashed at a Post Office).
* Limited companies.

Acceptable type of Cheque Payee (person cashing the cheque)

* private individuals
* married couples or joint payees
* partnerships.

Unacceptable type of Cheque Payee

* Cheques in favour of a private individual where the drawer is also a private individual unless they are the same.
* Giro cheques with an open crossing (these can be freely cashed at a Post Office)