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MONEY LAUNDERING – 4th DIRECTIVEBack

MoneyThe 2005 3rd Money Laundering Directive was replaced in June 2015 by the new 4th Directive. The new Directive will be transpired into UK law in 2017. The new rules will be consulted on in late 2015 and through 2016.

The purpose of the new legislation is to tackle the laundering of proceeds of crime and terrorism, and to help prevent UK businesses being exploited by organised criminal groups.

High Value Dealers

Businesses that trade in high value goods such as vehicles are covered by money laundering legislation. It means vehicle dealers and auctions who want to take large cash payments from customers must be registered with a money laundering authority and have processes in place to monitor and check customers who want to pay in large cash sums

Currently anyone who takes payments of €15,000 or more, as one or a series of linked transactions is caught by this legislation. Once the new legislation is in place the limit will reduce to €10,000 and will also include businesses that make cash payments of that magnitude too.

Registering

All businesses who want to take cash payments of €15,000 (€10,000 from 2017) or its equivalent in another currency must be registered. For firms that have FCA authorisation their authority will be the FCA. Most other firms will need to register with HMRC.

Firms can avoid registering and the administration that comes with it by simply not taking large sums of cash as payments. In fact we actively encourage members to consider not registering to not only avoid the administration but to protect themselves from criminals that might want to try to use their business to launder money. Only cash payments are covered by the legislation so debit/credit cards, cheques, bankers drafts and bank transfers are not included and there is no limit to the payments you can accept by these means. Putting a written policy in place that states the forms of payments you will accept and a cash limit will ensure your customers are fully aware of your payment policy and ensure you are compliant with money laundering regulations as well as dispensing with the need to be registered as a high value goods dealer.

We do though advise even if you are not registered that you identity check your customers and to keep records. This will help protect you if at any stage a customer payment is questioned by the authorities. Also you do not have to be registered to report any suspicious payments from a customer.

For more information contact 01788538336 or email louisewallis@rmif.co.uk

Posted by Sue Robinson on 09/10/2015