ECSH48582 - Cancellation and suspension of registration: operational guidance: cancellation process

You should consider the Money Laundering, Terrorist Financing or Proliferation Financing (MLTFPF) risks that a business poses to determine that cancellation of its registration is the appropriate sanction. See the guidance on determining an appropriate sanction available in ECSH81075.

 

Some examples of situations where you may determine that cancellation is the most appropriate sanction when a business has not complied with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017)  are:

 

  • Failure to satisfy the requirements detailed in a notice to suspend within the specified timeframe.
  • The business or its beneficial owners, officers, or managers (BOOMs) have been charged with or convicted of an offence listed in Schedule 3.
  • The appointment of a BOOM who has failed the fit and proper test.

 

You will also have to consider the MLTFPF risk presented by the business when determining if you should:

  • Issue an intention to cancel which will give the business the opportunity to rectify the issue without ceasing relevant activity;
  • Issue an cancellation notice to take effect at a future date; or,
  • If the interest of the public requires an immediate cancellation in line with Regulation 60(10), you may decide to proceed straight to issuing a notice to cancel with immediate effect.

 

Intention to cancel

You will draft an intention to cancel to the business and present this to the Governance Panel (GP) before issuing the letter. The letter must give the business an appropriate amount of time to submit representations about the cancellation before it will take effect. Your next action will depend on the following outcomes:

  • The business meets the requirements of the intention to cancel letter prior to the cancellation deadline.

Action: You will issue a further letter to the business confirming that a       cancellation is no longer necessary. The business can continue to provide relevant activity.

  • The business provides representations about the cancellation.

Action: You will fully consider all the points in the representations and then decide based on the information if you will proceed with the cancellation or not.

  • The business does not satisfy the requirements of the intention to cancel letter.

Action:  You will proceed to issue a notice to cancel.

 

Notice to cancel

You will draft a notice to cancel to the business and must take into consideration the size of the business and the risk of MLTFPF risk that it presents what date thebusiness must cease carrying out relevant activity. You must present this to the GP before issuing the notice to the business. If you are issuing a notice to cancel because the business has not satisfied the requirements of your Intention to cancel letter, your notice should be submitted to the GP and be ready to be issued on the date specified in your intention to cancel letter.

Once you issue the notice to cancel to the business it is not allowed to engage in relevant activity.

When cancelling a business’ registration you should consider updating the Economic Crime – Supervision (EC-S) watchlist. For further guidance on when to update the EC-S watchlist see ECSH47533.

Cancelling an accountancy service provider

When you cancel the registration of an Accountancy Service Provider (ASP) you should send an email (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to advise the team that ASP has been cancelled. This will prevent the codes being used by an unsupervised business. The agent maintainer team are responsible for the provision and management of ASP agent codes.

Cancelling a money service business

If cancelling the registration of a Money Service Business (MSB), you should:

  • Contact the Financial Conduct Authority (FCA) to notify them of the cancellation if the business acts as a money transmitter. Further guidance on contacting the FCA when cancelling the registration of a money transmitter is available in ECSH47584.

  • If the MSB acts as an agent of a principal MSB and you have determined that the business or its beneficial owner officer or manager (BOOM) are not F&P, you should contact the business’ principal firm to advise that its agent’s registration has been suspended. Further guidance on contacting a principal firm when suspending its agent is available in ECSH47585.

  • If the MSB has any agents, you should contact the business’ agents to advise them that they can no longer engage in relevant activity under that principal while the suspension is in place. Further guidance on contacting an MSB’s agents when suspending the business is available in ECSH47586.

When cancelling a business’ registration you should consider updating the EC-S watchlist. For further guidance on when to update the EC-S watchlist see ECSH47533.

For further details of the cancellation process, see the SWIs in EC-S knowledge library under the heading 2900 SWI.