ECSH47525 - Rejecting an application technical guidance

Economic Crime-Supervision (EC-S) can reject an application for registration where the application is incomplete.

Auto-rejections

An auto-rejection is where an application for supervision from EC-S is automatically rejected and not considered due to the non-payment of fees.

Regulation 55(5) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR2017) gives us wide discretion as to how to maintain our registers. This includes any pre-conditions for registration. We make it clear in guidance that applicants must pay a registration fee as a precondition for registration and failing to do so will mean that the application will not reach the review stage. We will not consider an application for registration in the absence of the registration fee payment.  

EC-S’ registration process allows businesses to submit an application for registration without payment of the relevant fee for 28 days.   

During the 28 days, two reminders are issued for the fee to be paid.  If the fee remains unpaid 28 days after their application has been submitted, the application is automatically rejected, and the business is informed of this decision by secure communication.   

Auto-rejections apply only for non-payment of application fees. There is no human intervention or review of the application, so we do not rely on regulation 59(1)(c)(ii) (refusal of application).  There is therefore no requirement to inform the applicant of their appeal rights in communications to the business:  auto-rejection is not a decision that falls within regulation 99 MLR2017 as carrying a right of appeal. 

Our guidance and communications must be clear that the application has been rejected for the non-payment of fees. The business must not trade in the relevant activity until they make a new application and pay the correct fees (if a business in an approvals sector only).  For Fit & Proper sectors, a business cannot trade until their application has been positively determined. Therefore, if their application is automatically rejected, they will need to reapply, pay the correct fees, and wait for the application to be positively determined before they can start trading. 

For operational guidance on auto-rejections please see ECSH47536.