A UK payments business has been fined a record £23.8m by HM Revenue & Customs for breaking money laundering rules in the latest crackdown on dirty money flows by UK enforcement agencies.
HMRC said MT Global, a Luton-based money transfer company, had committed “significant breaches of money laundering regulations” between July 2017 and December 2019, including failures to conduct risk assessments and due diligence.
The penalty is by far the largest fine by HMRC, which together with the Financial Conduct Authority and National Crime Agency, is battling to stem a tide of dirty money flowing through the UK. A national risk assessment of money laundering and terrorist financing published by the government last month estimated that “hundreds of billions of pounds” were laundered in the UK every year.
The MT Global fine is more than double the value of all penalties issued by HMRC in the 2019/20 financial year, which came to £9.1m in total. MT Global could not immediately be reached for comment.
Jessica Parker, a partner at law firm Corker Binning, said the fine was the “tip of the iceberg” for companies under investigation by HMRC because of the scale of the agency’s powers that allow it to seize assets and freeze accounts before handing down penalties.
“The record fine issued to MT Global today is the latest in a line of cases pursued by HMRC against money services businesses. This industry has been a focus of HMRC’s money laundering compliance activity for some time,” she said.
Nick Sharp, deputy director of economic crime at HMRC’s fraud investigation service, said businesses like MT Global that breach the rules “leave themselves, and the UK economy, open to attacks by criminals”.
HMRC has a range of powers it can use against businesses that breach money laundering regulations, including issuing penalties, censuring statements or suspending or cancelling a company’s registration. The agency can also take companies or individuals to court or refer them for prosecution.
Its efforts have reduced the number of so-called money service businesses, which offer currency exchange and money transfers, supervised by HMRC, by almost a fifth since 2017.
HMRC supervises about 30,000 businesses for anti-money laundering purposes including estate agents and financial services businesses not already supervised by the FCA or their own professional bodies.
The FCA is responsible for supervising the UK’s largest financial institutions. The watchdog’s record fine related to money laundering stands at £163m levied against Deutsche Bank in 2017 for failing to maintain adequate controls over a three-year period.
According to the most recent global enforcement report compiled by Duff & Phelps, UK fines for money laundering in the first half of 2020 amounted to $47.6m (£38.2m) compared with a total $127.9m in 2019.
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