Money Laundering Regulations

New Money Laundering regulations (MLRs 2007) came into force on 15th December 2007 in the UK. Generally speaking this should not affect exporters since the type of businesses that need to register with HM Revenue and Customs are Money Service Businesses, Trust or Company Service Providers, Accountancy Service Providers and High Value Dealers.

However, it is this last category, High Value Dealers (HVD) into which some exporters may unwittingly fall.

An HVD is defined as any business prepared to accept payment of at least Euro 15,000 (or equivalent in other currencies) in cash for goods. This does not include payments under debit or credit card, but it does cover the following circumstances:

- a single transaction over Euro 15,000 either paid in one go or in installments
- a single high value payment for a large quantity of low value goods
- wholesale and retail transactions

It does not include payments for provision of services.

Dealing with goods includes circumstances even when title to the goods is not taken, when the goods do not change ownership (e.g. sale or return) and when goods are purchased over the internet.

Therefore, if there is an intention to accept such payments, even if only once in a year, then there is a legal requirement to be registered. No funds over the above limits must be accepted unless the organization is included on the HM Revenue and Customs register.

If an organization decides that they will not accept such transactions, then it is strongly advised that a written policy is immediately put into place to that effect and that all employees are made aware of the policy.

Registration is quite simple. Download an MLR100 Form from the HM Revenue and Customs website (http://tinyurl.com/2uruhr), complete and sent to HM Revenue and Customs with £95.00 (as of December 2007). If the registration is accepted, this will be advised and registration will be valid for 1 year. Thereafter, the company can be re-registered or can cancel their registration as required.

Cash payments are now regulated under a number of laws: Money Laundering Regulation 2007; Proceeds of Crime Act (PoCA) 2002, Part 7; The Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001) and the EU Payments Regulation (EC) No. 1781/2006.

If there are any queries, HMRC can be contacted either by telephone (0845 0109000), e-mail (enquiries.estn@hmrc.gsi.gov.uk) or by post to HMRC National Advice Service, Written Enquiries Section, Southend on Sea, Alexander House, Victoria Avenue, Southend, Essex, SS99 1BD.

It is strongly suggested that anyone involved in international trade where traditionally some funding has arrived in cash seriously considers its policy on accepting cash payments and ensures that they a) make a decision on whether to accept cash payments, b) register immediately if they do decide to accept cash payments, and c) put in place written procedures regarding cash payments and ensures that everyone in the organisation is aware of these procedures and will abide by them.

Please note that this information is valid as of December 2007. It is also strongly suggested that a constant watch is kept on any amendments to these regulations and that policies are amended as required.