BM164_60_61:Layout 1 5/9/08 09:05 Page 1
Legal
Money Laundering:
A warning for
recruiters!
Gareth Kervin, Looks at parts of
The Money Laundering Act that
you might now know about...
I
t is common knowledge that The Money Dealer" if the agency is receiving high value practices. Furthermore, the Regulations will
Laundering Regulations 2007 came into payments to fund payments to the employee impose more severe criminal responsibility
force on the 15 December 2007. But do or to pay tax or NICs on the client's behalf. upon the specific individuals who fail to
you know how they will affect your business
Requirements
comply with its strict requirements. Such
or how to comply with the regulations? criminal liability may include imprisonment.
The Regulations extend the scope of the As a direct result of the Regulations certain The CEAEB already impose criminal
money laundering legislation to encompass a recruitment businesses will be required to be liability upon businesses for certain and
wider spectrum of businesses, including supervised by HMRC. This will involve: specific offences including charging fees to
recruitment businesses. The regulations will • being registered with HMRC before the 1 workers, failure to secure the proper conduct
mean that businesses may face potential April 2008. of an employment business, making false
criminal liabilities for non-compliance. • paying an annual fee based on the number records or failure to comply with a prohibition
"Trust or Company Service Providers" of business premises. order. Any person found guilty of these
("TCSPs") are now specifically included in the • an ongoing reporting obligation. offences is liable on summary conviction to a
Regulations as a relevant business. A TCSP • implemention comprehensive anti-money fine up to £5,000 for each offence.
can include any firm or sole practitioner who laundering systembs (to prevent and report).
Prevent misuse
are "acting or arranging for another person to • appointing a money laundering reporting
act" as a director or secretary of a company officer and to apply for a "fit and proper test". The Government's intention in extending
or as a partner of a partnership or a similar Regulation 18 of the Conduct of the money laundering provisions is to prevent
legal position. HM Revenue & Customs' Employment Agencies and Employment the misuse of corporate entities. It is hoped
(HMRC) guidance specifically include Businesses Regulations 2003 ("CEAEB") that the monitoring of TCSPs so tightly will
recruitment agents and management already provides that the identity of ensure those running such businesses are fit
agencies, involved with the appointment of hirer/employer must be verified prior to and proper and avoid improper use.
directors, shadow directors or company introduction of a work seeker and under Whatever the intention, it is clear that the
secretaries, under the definition. In addition, regulation 19 the identity of the work seeker impact on recruitment agencies and
recruitment businesses that provide payroll should be obtained. The Regulations extend employment businesses will be significant.
services could be caught under the definition this requirement by placing an obligation on
of an "Accountancy Service Provider" (under the agency or business to ensure the To contact Gareth, please email:
which "Payroll Agents" are specifically hirer/employer is not in severe financial gkervin@kingsleynapley.co.uk or call 020
referred to in HMRC Guidance) or "High Value difficulties or engaged in immoral legal 7814 1200
60 • issue 164 Business Matters
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68