ECSH45811 - Fit and proper and approvals: Contents: Operational guidance: The fit and proper test-What is tested? Honesty and integrity
When determining whether a business and all of its beneficial owners, officers, or managers (BOOMs) have or may be expected to act with probity in accordance with Regulation 58(4)(c) of Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), the decision maker (DM) should consider factors relating to honesty and integrity.
If the DM is satisfied that a business or its BOOMs have not or may not be expected to act with probity, this may also lead to the determination that the business is at risk of being used for money laundering or terrorist financing which would constitute a failure under Regulation 58(4)(b) MLR 2017 as well.
Below is a non-exhaustive list of factors that may indicate a lack of honesty and integrity. The DM should also consider any additional factors that demonstrate a lack of probity.
1. Whether the person has a relevant spent Schedule 3 of MLR 2017 conviction which could demonstrate a lack of honesty and integrity such as offences of dishonesty, fraud, financial or tax crime or an offence under legislation relating to money laundering, companies, building societies, industrial and provident societies, credit unions, friendly societies, banking, other financial services, insolvency, consumer credit companies, insurance, market manipulation and insider dealing, whether or not in the UK.
2. Whether
the person has been the subject of any adverse finding or any settlement in
civil proceedings, particularly in connection with any financial business,
misconduct, fraud or the formation or management of a body corporate.
3. Whether
the person has been the subject of, or interviewed in
the course of, any existing or previous investigation or disciplinary
proceedings, by HMRC, by other regulatory authorities (including a previous regulator),
clearing houses and exchanges, professional bodies, or government bodies or
agencies.
4. Whether
the person is or has been the subject of any proceedings of a disciplinary or
criminal nature or has been notified of any potential proceedings or of any
investigation which might lead to those proceedings.
5. Whether
the person has contravened any of the requirements and standards of HMRC or
other regulatory authorities (including a previous regulator), clearing houses
and exchanges, professional bodies, or government bodies or agencies.
6. Whether
the person has been involved with a company, partnership or other organisation
that has been refused registration, authorisation, membership, or a licence to
carry out any trade, business, or profession, or has had that registration,
authorisation, membership, or licence revoked, withdrawn, or terminated, or has
been expelled by a regulatory or government body.
7. Whether,
as a result of the removal of the relevant licence,
registration or other authority, the person has been refused the right to carry
on a trade, business or profession requiring a licence, registration, or other
authority.
8. Whether
the person has been a director, partner, or concerned in the management, of a
business that has gone into insolvency, liquidation, or administration while
the person has been connected with that
organisation or within one year of that connection.
9. Whether
the person, or any business with which the person has been involved, has been
investigated, disciplined, censured, or suspended or criticised by a regulatory
or professional body, a court or Tribunal, whether publicly or privately.
10. Whether the person has been dismissed, or
asked to resign and resigned, from employment or from a position of trust,
fiduciary appointment or similar.
11. Whether the person has ever been disqualified
from acting as a director or disqualified from acting in any managerial
capacity.
12. Whether, in the past, the person has been candid and truthful in all their dealings with any regulatory body and whether the person demonstrates a readiness and willingness to comply with the requirements and standards of HMRC and with other legal, regulatory, and professional requirements and standards.
References to regulatory bodies or requirements should be read as including UK and overseas tax bodies, and their requirements.
References to regulatory bodies includes any bodies in the UK or overseas whose role now or in the past included ensuring compliance with any anti-money laundering law, regulation, or other measure.