DMBM540230 - Debt and return pursuit: Money Laundering Fees and Penalties: Who is liable to pay the debt?

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The money service operator (MSO) must register with us and is liable to pay administration fees and any civil penalties imposed in relation to that registration.

Directors of limited companies, managers of partnerships and unincorporated associations

Money business operators are required to maintain certain procedures for the purposes of forestalling or preventing money laundering. They are required to train their employees in these procedures and the law relating to money laundering. A person who fails to maintain the procedures and carry out the training is guilty of an offence under Regulation 45 of the Money Laundering Regulations 2007. Regulation 47 of the Regulations provides:

“(1) If an offence under regulation 45 committed by a body corporate is shown -

  • (a) to have been committed with the consent or the connivance of an officer as well as the body corporate; or
  • (b) to be attributable to any neglect on his part,

the officer as well as the body corporate is guilty of an offence and liable to be proceeded against and punished accordingly.

(2) If an offence under regulation 45 committed by a partnership is shown -

  • (a) to have been committed with the consent or the connivance of a partner; or
  • (b) to be attributable to any neglect on his part,

the partner as well as the partnership is guilty of an offence and liable to be proceeded against and punished accordingly.

(3) If an offence under regulation 45 committed by an unincorporated association (other than a partnership) is shown -

  • (a) to have been committed with the consent or connivance of an officer of the association; or
  • (b) to be attributable to any neglect on his part,

that officer as well as the association is guilty of an offence and liable to be proceeded against and punished accordingly.

(4) If the affairs of a body corporate are managed by its members, paragraph (1) applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body.

(5) Proceedings for an offence alleged to have been committed by a partnership or an unincorporated association must be brought in the name of the partnership or association (and not in that of its members).

(6) A fine imposed on the partnership or association on its conviction of an offence is to be paid out of the funds of the partnership or association.

(7) Rules of court relating to the service of documents are to have effect as if the partnership or association were a body corporate.

(8) In proceedings for an offence brought against the partnership or association -

  • (a) section 33 of the Criminal Justice Act 1925 (b)(procedure on charge of offence against corporation) and schedule 3 to the Magistrates’ Courts Act 1980 (c)(corporations) apply as they do in relation to a body corporate;
  • (b) section 70 (proceedings against bodies corporate) of the Criminal Procedure (Scotland) Act 1995 (d) applies as it does in relation to a body corporate;
  • (c) Section 18 of the Criminal Justice (Northern Ireland) Act 1945 (e)(procedure on charge) and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (f)(corporations) apply as they do in relation to a body corporate.

(9) In this regulation - “officer” -

  • (a) in relation to a body corporate, means a director, manager, secretary, chief executive, member of the committee of management or a person purporting to act in such a capacity; and
  • (b) in relation to an unincorporated association, means any officer of the association or any member of its governing body, or a person purporting to act in such a capacity; and “partner” includes a person purporting to act as a partner.”

If a penalty is imposed it must be enforced even if there is little prospect of payment. If these penalties are not enforced dishonest company directors and officers can liquidate a company on which a penalty has been imposed.