Relevant persons must be 'fit and proper' under Money Laundering Regulations 2007

The Money Laundering Regulations 2007 (the Regulations) specify that firms will be refused registration as a money service business or trust or company service provider if relevant directors, officers or beneficiaries of the company fail a 'fit and proper' test. Failure to satisfy this test by even one relevant person can lead to the firm having to cease trading in this industry.

Each person with ownership of more than 25% of a money service business is required to take the fit and proper test, as is a firm's money laundering reporting officer (MLRO). Depending on a company's set-up, other principals or staff members may also have to be tested.

Testing is undertaken by HMRC. The person seeking approval provides the required information by completing a form and submitting it to HMRC together with the required fee. Filing false information on this form can be a criminal offence. Once successfully registered, business can proceed.

The conditions, set out in section 28 of the Regulations, that would lead to a person failing to satisfy the test include:

• Having a conviction for money laundering or terrorist financing offences or for fraud;


• Having been declared bankrupt, or an estate sequestered, and not having been discharged;


• Having been disqualified under the Company Directors Disqualification Act 1986;


• Failing to comply with UK or EU money laundering regulations; and


• Having been issued with a reclamation order under the Proceeds of Crime Act 2002.

The final criterion for failing the test given in section 28 is that the person undergoing the test is "otherwise not a fit and proper person with regard to the risk of money laundering or terrorist financing". This 'catch-all' clause has been described as a "worrying provision" and as a "minefield." The potentially catastrophic results of being caught by the clause make the advice of an anti-money laundering law expert invaluable.

Ensuring compliance with the Money Laundering Regulations 2007
Whilst the political strategy of preventing terrorist and criminal organisations from profiting from the proceeds of crime through anti-money laundering measures has reported successes, it has also placed an onerous weight on Regulated firms.

ML Solutions 4U is able to assist a firm's MLRO in shouldering that weight by providing targeted and tailored money laundering seminars and training packages, thereby providing the knowledge, techniques and systems that can help a firm to achieve compliance . Training of MLRO's and compliance staff is integral to ensuring appropriate systems and controls are put in place and maintained. ML Solutions4U provides this specialist training in addition to anti-money laundering training for all staff working in the regulated sector.

For more information regarding the support that ML Solutions 4U can offer your organisation with its obligations under the Money Laundering Regulations 2007, please complete the online enquiry form or telephone an anti-money laundering advisor on 0845 402 0001.

Money Laundering Information » Fit and Proper Under Money Laundering Regulations