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HMRC internal manual

Money Laundering Regulations: Compliance

From
HM Revenue & Customs
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Appendix 6 Agents and Principals: Identifying the status of money transmitters and how they should be registered

The following examples should help you in deciding how businesses should be registered with HMRC for MLR and with the FSA for the Payment Regulations.

Example 1.

A customer goes into a shop that carries out money transmission services and asks to send £500 to an overseas destination. The business tells the customer that his payment will be sent using the services of XYZ Money Services Ltd. The business tells the customer the rate of exchange and the amount of commission that will be charged. The customer asks for a better rate but the business tells the customer that the rates quoted are the rates set by XYZ and he has no discretion to change them. They are the only transmission services offered by the business.

In these circumstances the business is an agent of XYZ Money Services Ltd. In terms of registration the business should not be on the MLR Register in its own right. It should be included in the MLR register under the registration of XYZ Money Services Ltd as its agent. Similarly the business should be registered with the FSA as an agent of XYZ Money Services Ltd.

Example 2.

A customer goes into another money transmission business looking to send £500 overseas. The business tells the customer that he can send the money using XYZ Money Services Ltd or UVW Transfers Ltd. Comparing exchange rates and commission the UVW service is marginally better. The business tells the customer that the rates offered are set by UVW and XYZ.

In these circumstances the business is an agent of both UVW Transfers Ltd and XYZ Money Services Ltd. The business should not be registered for MLR in its own right. Instead the business should be included in the registrations of UVW and YYZ as its agent. The business should be registered identically with the FSA.

Example 3.

A customer again looking to send £500 overseas enters a third shop that does money transmission. The business offers to send the money quoting a rate of exchange and commission. The customer asks the business if that is the rate set by somebody else such as UVW Transfers Ltd or XYZ Money Services Ltd. The business tells the customer that the rates offered are the businesses own rates and that although they may arrange for the money to be sent using one of these businesses they will do so as their customer.

In these circumstances the business is operating independently in its own right and not as an agent of any other business. The business should be registered as a money transmitter on both the MLR and FSA registers.

Example 4.

A customer enters another shop offering money transmission services looking to send £500 overseas. The business advertises that it is an agent of UVW Transfers Ltd it has its signage and posters on display. The customer asks about the rate of exchange and commission and the business quotes the rates set by UVW but offers the customer a better deal quoting its own rates telling the customer that it will place the transaction with another IPSP.

In these circumstances the business is operating in a dual capacity. It is an agent of UVW Transfers Ltd but is also operating as an independent money transmitter in its own right as there is no contractual relationship in the business that it places with the other IPSP( see MLR3C17100). Consequently the business should be included on the MLR and FSA registers in its own right in respect of the independent business that it carries out. It should also be included in the MLR and FSA registers as being an agent of UVW Transfers Ltd.