I run a business – do I need to register for AML supervision?

13 Feb 2024, 29 mins ago

We are receiving enquiries from businesses in various sectors concerning the need to register for anti-money laundering (“AML”) supervision.

In summary, the rules are complicated, and it is recommended to always seek expert legal advice.

According to Regulation 54(2) of the 2017 Money Laundering Regulations (“MLRs 2017”), businesses which are expected to register for AML supervision include:

  • financial and credit businesses
  • independent legal professionals
  • accountants, tax advisers, auditors and insolvency practitioners
  • trust and company service providers
  • estate agency businesses
  • letting agency businesses (with individual monthly rents of the €10,000 or more)
  • casinos
  • high value dealers (handling cash payments of €10,000 or more in exchange for goods)
  • art market participants (buying, selling or storing art worth €10,000 or more).

However, below we address a checklist of some of the preliminary points that jewellery businesses should consider.

Preliminary points for jewellery businesses to consider

  1. Are you currently registered for AML supervision with the relevant authority (FCA / HMRC / etc.)?
  • If you have answered ‘no’ to Question A above, then you need to determine whether you should be registered.  

This depends on whether you:

  • offer any type of banking / financial services on the basis of the precious metals your business deals in (gold, silver, etc.):
    • e.g., offering credit (pawn shop services).
  • handle cash payments of €10,000 or more in exchange for goods (it could be a single payment or a series of payments for a single transaction totalling €10,000).
  • If you have answered ‘yes’ to (i), you should be registered with either the FCA, or HMRC**.

**This is dependent on which category of money service business your company falls into. HMRC is the supervisory authority for money service businesses that are not supervised by the FCA (see here for the list of FCA-supervised firms); the business category shall be determined by looking at the client’s business profile more thoroughly.

  • If you have answered ‘yes’ to (ii), you should be registered with HMRC.
  • If you have answered ‘yes’ to both (i) and (ii):
  • you would not need to register with HMRC if the business is already supervised by the FCA.
  • If your business is already regulated by the FCA for another purpose, you would need to contact both the FCA and HMRC to give the details.
  • There are businesses supervised by HMRC which also need to be registered with or authorised by the FCA; this will need to be determined based on the answers to the above questions.

Penalty for failing to register:

Please note that the penalties for failing to register are severe.

According to the UK Government website:

  • Businesses are deemed as “breaking the law if you carry on a business activity covered by the regulations but do not register with a supervisory authority.”
  • Trading while not registered is a criminal offence, which could result in a penalty or prosecution.
  • More specifically, this includes a civil financial penalty or criminal prosecution that could result in an unlimited fine, a prison term of up to 2 years, or both (see also Reg 86(1) and (2) of the MLRs 2017).

How Gherson can assist

Gherson’s regulatory, white-collar and investigations team are highly experienced in providing assistance, advice and guidance on how you can successfully navigate and adhere to legal requirements regarding corporate compliance. This includes providing a comprehensive and unparalleled range of regulatory and compliance services to prospective customers.

Specifically, Gherson’s white-collar crime and regulatory team are able to provide advice and assistance with AML and sanctions compliance, including in situations involving cryptoassets

Finally, the team has recently started a series of blogs on the regulation of crypto, with the aim of advising those who work in the compliance of this sector. In addition, for those who would like advice on relevant issues, including those who have had issues with the FCA registration process, our specialist regulatory and compliance team can guide individuals and companies through the process.

Please do not hesitate to contact us for further advice, send us an e-mail, or, alternatively, follow us on X, Facebook, or LinkedIn to stay up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024