MLR3C10220 - High Value Dealers: How does an HVD operate?

Most HVDs are registered for VAT and are therefore obliged to keep their business records for at least 6 years. They may keep their records of cash transactions in a number of ways. Some businesses record their cash receipts through a till or in a cash book. Others keep detailed tax invoices and have customer’s accounts in a sales ledger. Records can be manual or computerised, single entry or double entry. Businesses that make use of computerised accounts packages (such as SAGE) can set up a nominal code for cash transactions. This enables them to be easily identified and a report can be run-off to provide a basis for testing. However whatever method is used for anti-money laundering purposes there should be a separate record of cash receipts into the business so that relevant transactions can be easily identified. Without oversight of relevant business, risk cannot be accurately assessed and mitigated.

HVDs sometimes operate from temporary sites, for example auctioneers who may hold events away from their registered premises. Although they are not required to register and pay a fee for these temporary sites they are required to keep a record of where and when these events took place. It is important when visiting HVDs to check whether this situation occurs and that a separate record is kept of any such events.

HVDs with a number of sales outlets may have decided not to register all of their premises and introduced a policy restricting the premises where HVPs are accepted. Where this policy applies businesses must have introduced sufficient controls to ensure that HVPs are not accepted at any unregistered premises. For example all staff must be aware of the business’ policy and there should be management checks to ensure that such payments are not accepted by mistake.