ECSH82000 - Sanctions for non-compliance: warning letters
Introduction
Warning letters can be used to address non-compliance by the business with their obligations under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). There is no legal requirement within MLR 2017 to issue a warning letter. However, they can be used where the non-compliance is considered to be minor breaches of MLR 2017, and other sanction(s) would not necessarily be an appropriate response to the non-compliance identified. When deciding whether to issue a warning letter consideration should be given to the risk(s) posed by the breach identified. Warning Letters may be appropriate for first-time minor breaches of MLR 2017. If the decision maker (DM) considers the breaches identified and/or the risks are not minor, consideration should be given to whether other sanctions are more appropriate to address the non-compliance and the risk.
Minor breaches would be those that did not lead to an increased risk of money laundering, terrorist financing or proliferation financing (ML/TF/PF)
Warning Letters are designed to promote a positive behavioural change and to ensure that minor non-compliance is acknowledged and addressed within an appropriate timescale. Therefore, the warning letter will outline what steps the business needs to take to address the breaches identified and the timeframe for dealing with them. It must also specify the relevant period of the contravention(s) covered by the warning letter, see ECSH 82850. Where breaches have been identified an advice letter must not be issued.
If a business has previously received a warning letter and a further intervention identifies the business is still non-compliant with its obligations under MLR 2017 a further warning letter would not normally be an appropriate response to the non-compliance.