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anti-money laundering registration

On 15 December 2007 the Money Laundering Regulations (the Regulations) came into force across the UK. The purpose of the Regulations is to detect, deter and disrupt financial crime and terrorist financing by reducing the possibility of legitimate businesses being used for money laundering. Businesses are required to take appropriate steps to prevent criminals using their business as a mechanism by which to do so and to report suspicious activity to the Serious Organised Crime Agency (SOCA).

As a result of the Regulations, the compliance of certain businesses with their requirements under the Regulations will be supervised by the Office of Fair Trading (OFT) and those businesses will be required to register with the OFT. Consumer Credit Financial Institutions (CCFIs) are one of the types of supervised businesses who need to be registered with the OFT before 31 January 2010.

what is a CCFI?

CCFIs are defined as businesses carrying on consumer credit lending activity who are neither authorised by the Financial Services Authority (FSA) nor money service businesses supervised by Her Majesty's Revenue and Customs (HMRC).

As a consumer credit lender the business should hold a consumer credit licence for category A. However, the OFT will supervise those business that require a category A licence whether they hold a current licence or not.

To summarise, if you are a CCFI and hold a category A consumer credit licence for providing consumer credit, you will need to register with the OFT. If you hold a consumer credit licence but not for category A and do not lend, or if despite holding a category A licence you do not engage in lending, you will not be a CCFI and will not be supervised by the OFT.

registration process

The OFT launched registration of businesses it supervises on 31 July 2009 and the OFT requires all supervised businesses to register before the 31 January 2010. Failure to register could lead to the OFT imposing a civil penalty or taking a prosecution if business is carried on after 31 January 2010. Prosecution could result in a sentence of up to two years in prison and/or an unlimited fine.

In order to become registered, the registration form must be completed together with a fee payment of £115.00 per premises for 2009/10.

The OFT have suggested that business apply for registration no later than the end of November 2009 to avoid being caught in the predicted peak of registration applications prior to the Christmas period.