ECSH82725 - Sanctions for non-compliance: financial penalties: calculating the amount of a financial penalty

When the decision-maker (DM) has considered all of factors and has decided that a financial penalty is appropriate then they should go on to consider an appropriate amount.

The DM should refer to the financial penalties framework in order to calculate the appropriate penalty relevant to the circumstances of the case.

Economic Crime Supervision have a sanctions framework and financial penalties can be categorised according to 4 types:

Type 1 – Compliance breaches (benefits gained or scale charge), see ECSH82785

The penalty is calculated differently for Money Service Businesses (MSBs)/High Value Dealers (HVDs)/Art Market Participants (AMPs) and Trust or Company Service Providers (TCSPs) /Accountancy Service Providers (ASPs)/Estate Agency Businesses (EABs)/ Letting Agency Businesses (LABs). This is because of the different vulnerabilities to money laundering which are likely to arise as a result of regulatory contraventions within these business sectors. The basic difference is that regulatory breaches by MSBs/HVDs and AMPs mean that their actual business income or turnover will potentially include proceeds of crime which may have been successfully laundered through their business when the Regulations are not correctly applied. In contrast, regulatory contraventions by TCSPs/ASPs/EABs/LABs expose the business to the risk of being exploited by customers for money laundering. The amount of money potentially exposed to money laundering as a result of the breaches will have a direct relationship to the number of clients who were not subjected to the controls imposed by the Regulations.

Type 2 – Registration breaches (carrying out relevant activity/activities whilst unregistered), see ECSH82795

Type 3 – Failure to notify HMRC of material changes and/or inaccuracies to information provided at registration or subsequently, see ECSH82800

Type 4 – Failure to provide information or access to premises, see ECSH82805

For further guidance, see ECSH82775.