HMAG30120 - Registration and approval: warning letters
A warning letter provides an approved person an opportunity to improve their compliance. It is not a pre-requirement for issuing a sanction, instead it is issued where we consider compliance is likely to improve to avoid the sanction we intend to apply, such as a restrictive condition or revocation.
It should not be issued if there is significant revenue risk in allowing the high-risk activity to continue (for example, where there is fraud) or a change in behavior is unlikely (for example, the business has not improved compliance after earlier discussions and correspondence). Also, it cannot replace a duty assessment where a duty point has occurred.
Where required, a warning letter should be issued to the business promptly (normally within 5 working days of the risk being identified). It should clearly set out what is wrong and what we intend to do if a sustained improvement is not made. It should set out what the business must do and by when, to avoid our intended action. Sufficient time should be allowed to enable business to make necessary changes for continuous improvement. At the end of the deadline set, we should re-evaluate whether our intended action is still necessary. Where it is, we should proceed as originally warned. Where the activities we want to control are carried out by a third-party service provider (such as a warehouse-keeper), but the behavioral change needs to come from the service provider’s client, it is to this client that a warning should normally be addressed.
If revoking an approval, then we should normally issue a ‘minded to-revoke’ letter as discussed below unless immediate revocation is required where a ‘notification of decision to revoke’ letter should be issued.