ECSH64400 - Regulation 79 - Imposition of civil penalties
The Law
https://www.legislation.gov.uk/uksi/2017/692/regulation/79
What it means
Reference to “civil
penalties” within Part 9/Chapter 2 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) means the civil measures which
can be taken when a business doesn’t comply with the regulations, not just
financial penalties (i.e. fines).
This regulation sets out that one or more of the “civil penalties” in
regulation 76 (the power to impose fines and statements), (77 (the Financial
Conduct Authority (FCA)’s) power to suspend and remove authorisation), and 78
(prohibitions on management) can be imposed by a supervisory authority in relation
to the same breach.
This is explained to businesses in “Civil Measures for Money Laundering
Supervision” published on GOV.UK – see link in the further reading section
below
Purpose
In simple terms, more than
one sanction can be applied for the same breach/es by HMRC. This includes
financial penalties (on the business, individuals knowingly concerned with the
breaches, or both), a censure statement and/or temporarily or permanently prohibiting
a person from a having a management role in a relevant business.
It also means that HMRC can impose civil penalties on a business regulated by
the FCA, even if the FCA also intends to take action for non-compliance.
You can find more information on all of the individual sanctions in EC-S
Handbook – see link to ECSH 80000 Sanctions for non-compliance below.
Time Line
MLR 2017 brought in additional civil sanctions, therefore this does not apply to previous MLRs.
Best Practice
You must ensure that any
sanction/s you impose are proportionate, to address both the non-compliance and
the risk of money laundering, terrorist and proliferation financing.
Use the guidance on how to determine the correct sanction/s in the Further
reading section below. You must record your rationale in the Decision and
Evidence Log (DEL).
AMP - No additional best practice.
ASP - No additional best practice.
EAB - No additional best practice.
LAB - No additional best practice.
HVD - No additional best practice.
MSB - No additional best practice.
TCSP - No additional best practice.
Further Reading
Sanctions for non-compliance: contents
Handout 2 - New Sanctions Framework Essentials 20190927.pptx
https://www.legislation.gov.uk/uksi/2017/692/regulation/83
Sanctions for non-compliance: sanctions framework: determining an appropriate sanction