Date of issue: 1st March 2004

Register Now To Prevent Money Laundering

Businesses which accept large cash payments in return for goods are now required to register with Customs and Excise in order to comply with their responsibilities under new anti-money laundering laws.

Chartered accountants Clement Keys, Birmingham says the new Money Laundering Regulations 2003 will affect any business dealing in goods that accepts the currency equivalent of 15,000 Euros (c. £9,000) in a single transaction. From 31 March they will need to be registered with Customs and Excise as a High Value Dealer (HVD).

Under the new regime, businesses which deal in this type of cash transaction - called High Value Payments (HVPs) - will need to implement the CATCH policy:

Control - put systems in place
Appoint a nominated officer
Train staff
Confirm the identity of all customers
Hold all records for at least 5 years

"These new regulations are designed to tighten controls against money launderers, who are finding increasingly sophisticated ways to disguise their frauds," says Steven Simmonds, Director of VAT Services at Clement Keys, Birmingham.

"They are far reaching in their scope and give Customs and Excise the power to inspect premises and company records to ensure compliance."

Businesses which are regulated in a professional capacity, such as solicitors, accountants and estate agents and companies who provide services not classed as High Value Dealers and do not need to register.

High Value Payments are cash payments of the equivalent of 15,000 Euros and include retail and wholesale transactions plus orders placed via the Internet. They concern all types of goods and include sales where a series of cash payments is made towards a single transaction.

Companies which already accept such cash payments will need to apply CATCH from 1 March and ensure they are registered by 31 March. Any business which intends to deal in High Value Payments after 1 April should register immediately. An annual fee of £60 is payable for the period 1 April 2004 to 31 March 2005 inclusive.

HVDs must register their legal entity and supply details of all outlets from which they trade, excluding overseas outlets and support services or administrative operations. Businesses which fail to register with Customs and Excise but continue to accept HVPs could be fined up to £5,000 for each failure to comply or face a two-year custodial sentence and/or a fine.

"The principles embodied by CATCH, especially documenting, checking and updating internal systems and training staff in their legal responsibilities to report suspicious activity, will help High Value Dealers protect themselves against fraudsters who may try to use their businesses to 'clean' illegally obtained money or assets," adds Steve Simmonds.

"Ultimately, companies should get to know their customers and the source of their funds so that they can judge whether it is reasonable for these customers to want to make HVPs."