Retailers and estate agents face jail as new Money Laundering Regulations come into force
Red tape burden for small businesses
- Relevant businesses must register with HMRC
Ordinary businesses such as retailers and estate agents will be responsible for identifying and reporting customers who may be involved in money laundering from December 15 2007 in a radical extension of the existing Money Laundering Regulations, warns Wilkins Kennedy, the Top 30 accountants.
Under the new regulations businesses defined as High Value Dealers (HVDs) will have a legal responsibility to report related or single cash transactions, including travellers cheques, totally more than €15,000 (approximately £11,000) by the same customer if they suspect money laundering.
These laws will mean that if a business suspects a person of having obtained money illegally (e.g. tax evasion) in the UK or another country that business will be obliged to make a report to the UK’s Serious Organised Crime Agency (SOCA). This is regardless of the amount involved.
According to Wilkins Kennedy, businesses affected will be obliged to perform identity checks (e.g. keep copies of passports) and determine the origins of cash, which could mean questioning customers or scrutinising bank records.
Steve Golder, Partner, Wilkins Kennedy, comments: “This is a huge red tape obligation and captures an incredibly wide range of businesses. Unlike banks or accountants, these businesses have no real experience of enquiring about the origins of money and will find it a completely alien concept.”
“The businesses caught by the new laws range from estate agents to car dealers and jewellers, and potentially any retailer or wholesaler dealing in high value goods, including goods ordered via the Internet. The scope is truly staggering.”
Wilkins Kennedy says that businesses that fall within the scope of the new regulations will be required to register with HMRC before being allowed to act as HVD businesses. The registration fee is £95 for each business premises.
Steve Golder says: “Businesses could be prosecuted for failing to register, and even once registered, failing to report a suspicion of money launderingin circumstances where a suspicion should have been formed.”
“It is likely that many businesses are unaware that the Regulations apply to them and that there is a requirement for them to register with HMRC.”
Wilkins Kennedy says that HVD businesses will also be burdened by onerous record-keeping requirements. Documentary evidence of checks they have carried out on customers will have to be stored for at least five years.
Steve Golder says: “The cost, particularly for small businesses, of training staff, conducting checks and keeping records could be significant.”
“These regulations could affect businesses’ ability to trade. Customers who may have perfectly legitimate reasons for paying for goods in cash may be deterred if subjected to over-zealous checks.”
ENDS
Press enquiries:
Steve Golder Partner Wilkins Kennedy Tel: 020 7403 1877
Paul Arvanitopoulos or Nick Mattison Mattison Public Relations Tel: 020 7645 3636
