Money laundering: new and wide-ranging registration obligations

From 1 April 2008, extensive new registration obligations will be introduced by the Money Laundering Regulations 2007. The following details are drawn from the relevant HM Revenue & Customs guidance notes (MLR 9):

What is a Trust or Company Service Provider?

A Trust or Company Service Provider is "any firm or sole practitioner who by way of business provides any of the following services to third parties:

1. forming companies or other legal persons;
2. acting or arranging for another person to act:
   1. as a director or secretary of a company;
   2. as a partner of a partnership; or
   3. in a similar position in relation to other legal persons;
3. providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or arrangement;
4. acting or arranging for another person to act as:
   1. a trustee of an express trust or similar legal arrangement; or
   2. a nominee shareholder for another person other than a company listed on a regulated market which is subject to disclosure requirements consistent with European Community legislation or equivalent international standards."

What types of businesses will be covered?

Businesses covered could include:

• Company formation agents.
• Providers of registered offices, business addresses, accommodation or correspondence addresses for businesses other than sole proprietors.
• Recruitment agencies and interim management agencies, involved in arranging for the appointment of directors, shadow directors, company secretaries or professional trustees.
• Individuals providing their services as either a permanent or interim director, shadow director or company secretary or professional trustee (including will writers) to a client by way of business: this appears wide enough to catch e.g. any non-executive director who is retained on a consultancy and not an employed basis (including via a personal service company). Note that where an individual is exempt due to membership of a relevant professional body, the exemption may not extend to their personal service company.
• Family offices and other businesses when they act or arrange for others to act as professional trustees.
• Accountants, auditors and tax advisers when they provide any of the services listed above unless they are already supervised by the FSA or by a recognised professional body.

What is a Money Service Business?

A Money Service Business (MSB) carries out the following activities by way of business:

• acting as a bureau de change;
• transmitting money or any representation of money by any means; or
• cashing cheques payable to customers.

What is a High Value Dealer?

A High Value Dealer business (HVD) is any business that is prepared to accept payment in cash of at least €15,000 (or the equivalent in any currency) for goods, whether in a single transaction or in several instalments. This includes where customers pay cash directly into a business bank account. Examples may include auctioneers, car dealers, jewellers, antique dealers and similar businesses.

What is an Accountancy Service Provider?

Accountancy Service Providers (ASPs) are auditors, external accountants and tax advisers. An auditor is any person eligible for appointment as a company auditor under section 25 Companies Act 1989(a) or article 28 of the Companies (Northern Ireland) Order 1991 (b) who by way of business provides audit services.

• An external accountant is any firm or sole practitioner who by way of business provides accountancy services.
• A tax adviser is any firm or sole practitioner who by way of business provides advice about the tax affairs of another person.

What types of businesses will be covered?

Businesses covered may include;

• Accountants
• Auditors
• Tax advisers
• Book-keepers
• Payroll agents
• Tax consultants

Registration fees are payable and in addition, Money Service Businesses and Trust or Company Service Providers must satisfy a "fit and proper person" test for which an additional fee is payable. In some cases, businesses already registered (e.g. as High Value Dealers) will need to reregister.

For more detail, see the guidance from HM Revenue & Customs on the new money laundering obligations and read its guidance note MLR 9.