ECSH63320 - Regulation 9 - Carrying on business in the UK

Category Heading 

Description 

The Law

Regulation 9 - Carrying on business in the UK 

What it means

A person undertaking relevant activity in the course of business in the UK must be registered for AML supervision by one of the UK AML supervisors (per regulation 8, subject to regulation 15 exclusions). In circumstances where it is clear that a business is in the UK, regulation 9 does not need to be considered. However, if this is unclear, this regulation helps understand the certain circumstances which would require a business to be on the UK register.  

Purpose

To ensure business'/persons considered to be carrying out relevant activity in the UK are supervised in the UK even if not based here. 

Time Line

There was no specific regulation defining ‘carrying on business in the UK’ under previous Regulations 

What to establish

Please refer to the ECSH42500 chapter of this handbook.

How to test compliance and evidence to obtain 

“Day-to-day management” - This means the management or oversight of the business activity. It does not mean the relevant activity itself (“carrying out” of the business’s main work). 

“Responsibility for”- The UK office merely needs to be responsible for the day-to-day management. It can be differentiated from “liability for” day-to-day management. It does not necessarily mean that the day-to-day management activity is being carried out by the UK office – the UK office only needs to be responsible for it.  
The business’s officers, managers and beneficial owners do not need to be based in the UK in order for the business to be treated as being in the UK for AML purposes.  
The location of the business’s customers is irrelevant for the purposes of this regulation, they do not need to be UK customers. 

For a business to be considered UK based under regulation 9(1) and 9(3) it is necessary to understand where the responsibility for day-to-day management of the relevant activity is located. This is determined on a case-by-case basis. 

Best Practice

It is not relevant where the actual work of the business is being carried out, or where the owners are living, or where the customers are based. It is only necessary to understand where the responsibility for day-to-day management of the relevant activity is located, in order to understand whether a business must be considered UK-based for the purposes of regulations 9(1) & (3).  
 
At its simplest, the application of regulation 9 (alongside other regulations) provides three broad rules-of-thumb: 
 
Where all activity is UK-based, registration is required. 

Where all activity is outside of the UK, and there is no UK footprint at all, EC-S should not register. 

Where the business has both a UK and overseas footprint, there is nothing in the MLRs that covers what to do when registration in both the UK and another country seems probable. A relevant person should comply with the requirements of all countries in which it is active but be mindful that businesses with branches and subsidiaries located outside of the UK must have equivalent procedures (see regulation 20). 

AMP

No additional Best Practice. 

ASP

No additional Best Practice. 

EAB

No additional Best Practice. 

HVD

No additional Best Practice. 

MSB

No additional Best Practice. 

TCSP

No additional Best Practice. 

Further Reading

FAQs

 (This content has been withheld because of exemptions in the Freedom of Information Act 2000)