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Introduction

of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) permits HMRC to suspend or cancel a business鈥檚 registration. The evidence required to suspend or cancel a business is the same. However, as cancellation leads to the permanent removal of the business from the register, in practice, the courts would apply a higher standard of evidence for cancellation.

Where the decision maker (DM) has reached the conclusion that suspension or cancellation of registration is an appropriate sanction, they must issue a notice of that decision. The suspension or cancellation of registration can take effect immediately or on a given date.聽

Suspension or cancellation of registration can be used as a stand alone sanction or as part of a range of sanctions, depending on the facts of the case.

Suspension of registration

Suspending a business鈥檚 registration聽means the temporary removal of the business from聽HMRC鈥檚聽register聽of supervised businesses.聽This effectively means that the business cannot聽lawfully engage in the activity, or activities they are supervised for, under MLR 2017, whilst they are suspended. Suspension is therefore a significant (albeit temporary) sanction and should only be applied for the length of time necessary to satisfy the DM that聽the business has satisfactorily addressed the money laundering/terrorist financing/proliferation financing risks/non-compliance.

It may be appropriate either to extend a period of suspension, or to follow it with cancellation in cases where the DM determines that the risks of money laundering or terrorist/proliferation financing and associated compliance failures have not been sufficiently addressed. 聽

During the period of suspension, the ongoing intervention may reveal further or more significant breaches of the regulations and/or risks which could lead to the registration of the business being cancelled.

For more information on suspension of registration, see ECSH83825.

Cancellation of registration

Cancelling a business鈥檚 registration, which is also known as a statutory cancellation, prevents the business from trading in a 鈥榬elevant activity鈥� as defined in MLR 2017. Cancellation of registration ensures the permanent removal of the business from HMRC鈥檚 register of supervised businesses.

Cancellation of registration is considered a severe sanction as it prevents the business from legally trading in a relevant activity. It is therefore only to be used in the most serious cases and/or sustained non-compliance and聽where allowing the business to remain on the register presents too great a risk.

Additionally, registration of a business can be cancelled where, following a series of reminders:

• A business fails to pay its annual fees, the registration will be automatically cancelled.
• A business registered under the 2007 regulations that failed to provide the additional information required for inclusion in MLR 2017 registers ( or 聽MLR 2017).

Cancellation of registration is unlikely to be appropriate where the DM considers other sanctions are more appropriate to encourage regulatory compliance and to 鈥榙rive through鈥� behavioural change.