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Guidance update for businesses covered by money laundering regulations

HM REVENUE AND CUSTOMS News Release (NAT 35/08) issued by The Government News Network on 31 July 2008

New guidance on registering under the Money Laundering Regulations 2007 is published today by HM Revenue & Customs (HMRC).

Guidance for Trust or Company Service Providers (TCSPs) and Accountancy Service Providers (ASPs) has been updated and is available on HMRC's website to reflect feedback from businesses in their discussions with HM Treasury.

TCSPs and ASPs, who have not yet applied, will have to submit their applications to register with HMRC by the new date of 30 September 2008. In addition, TCSPs will need to send in their fit and proper application forms by the same date.

The new guidance includes clarification for TCSPs that:

* Non executive directors only fall within the scope of the regulations when they act as a director for firms with high risk business

* Will writing is now outside the scope of the regulations
and for ASPs that:

* Customs practitioners fall within the scope of the regulations when they carry out accountancy services or provide tax advice.

HMRC's Business Director, Money Laundering Regulations, Melissa Tatton said:

"The updated guidance will help businesses decide if they are required to register with HMRC. It will give businesses greater clarity and reduce the number of businesses that need to register with us, whilst retaining effective anti money laundering measures across all relevant businesses."

HMRC will be writing to TCSPs and ASPs who have already applied to register and who may be affected by the updated guidance. Businesses that confirm they no longer need to register will have their fees refunded.

Further information and the updated MLR 9 Guide to Registration can be found on the HMRC website at http://www.hmrc.gov.uk/mlr/mlr9-reg-dates-announced.htm. Businesses can also download registration and fit and proper application forms to help them apply to register.

Notes for editors

1. On 15 December 2007, The Money Laundering Regulations 2007 came into effect. They revoked and replaced the 2003 Regulations. The new Regulations brought new businesses under the supervision of HMRC, a new fit and proper test for people in positions of ownership or control in Money Service Businesses (MSBs) and TCSPs, and required businesses to implement risk-based systems and controls to help prevent money laundering and criminal financing.

HMRC already supervises MSBs and High Value Dealers (HVDs) for compliance with existing Money Laundering Regulations. The new regulations extended this supervision to ASPs as well as TCSPs.

ASPs, MSBs and TCSPs will all need to register with HMRC unless they are already supervised by a designated professional body. HVDs are already required to register with HMRC.

2. Changes to Guidance for TCSPs and ASPs - Extract from Guidance

What businesses will not be Trust or Company Service Providers?

Some officers of companies or partners of partnerships:
* Individuals providing their services as company director, company secretary or partner provided they are not specified above including;
Any individual providing company director, company secretary or partner services to:

* A firm already supervised under the MLRs 2007,or

* A public authority, or a firm authorised by a public authority to act on their behalf where the only customers are public authorities.

Some Trustees

* Sole practitioners and firms who only provide professional trustee services limited to the following low risk trusts;

* Straightforward express testamentary trusts such as those creating life interests for spouses or partners, trusts for persons under dependents or persons under a disability or those that make provision for a charity.

* Express lifetime trusts created to manage the affairs of a person under a disability;

Occupational pension schemes and employee share schemes.

Recruiters and employment agencies

* Firms and sole practitioners that only offer to their clients, in relation to the appointment of persons to act as a company director, company secretary, partner or professional trustee, the normal business services of employment agencies and employment businesses including the activities of;

* Advertising for, headhunting or otherwise searching for suitable candidates for these positions (whether permanent or temporary)

* The analysis of applications by such candidates and referring CVs to potential employers

* Conducting preliminary and other interviews of such candidates

* Checking qualifications or references of such candidates

* Drawing up short lists of such candidates and making recommendations to clients about such candidates which stop short of actually selecting the final candidate

* Supplying employers with a company director, company secretary, partner or professional trustee, (including temporary ones) so long as the employment agency or business does not itself provide for a person's appointment to a relevant position in the way described in the example in paragraph 6.1.2.

Other exclusions

* Will writing
ASPs - What types of businesses will be covered?

Businesses covered include;

* Accountants
* Auditors
* Tax Advisers
* Book-keepers
* Payroll Agents
* Tax consultants
* Customs Practitioners
* Interim managers undertaking any of the activities of the businesses listed above.

3. Extension of TCSP and ASP Registration deadlines.

TCSPs were due to register by 1 April and ASPs by 1 July 2008.

On 26 March HMRC announced that the MLR 9 Registration Guidance for TCSPs would be updated in April to reflect feedback from businesses in their discussions with HM Treasury about the interpretation of the regulations as they applied to TCSPs.

On 6 May we announced that we wanted to make sure the right businesses registered with HMRC, and the guidance for ASPs and TCSPs was still being finalised.

On 17 June we explained that work was continuing and told businesses what they needed to do and that we would set a new application deadline of a minimum of four weeks from the date on which updated guidance is published.

This current announcement provides the new guidance and gives businesses over 8 weeks in which to apply to register with us.

4. Registration forms.

To help businesses identify when they need to register, a registration summary is available at http://www.hmrc.gov.uk/mlr/reg-summary.htm

The two forms on the website that businesses need to familiarise themselves with are the updated registration form, MLR 100, and the 'fit and proper test' form, MLR 101. All those affected (with the exception of existing HVDs, who will be contacted separately by HMRC) will need to register using the revised MLR100 registration notice. MSBs and TCSPs, in addition, will need to complete the MLR101 fit and proper form for all relevant people within the business as part of their registration application.

5. Fit and Proper Test
The fit and proper test is an objective negative-criteria check of the background of an applicant intended to disrupt criminal access to the Money Service Business and Trust or Company Service Provider sectors.

The number of people in each business subject to the test will depend on the structure and organisation of that business. Those subject to the test include sole proprietors, partners in a partnership, directors of a company, significant shareholders in a company and the nominated officer of the business.

Issued by HM Revenue & Customs Press Office

Website http://www.hmrc.gov.uk