08 Jan 2021
A money transfer company has been fined a record £23.8 million by the taxman for breaches of money laundering regulations.
The penalty was imposed on MT Global, based in Luton, which claims to offer a financial service across 97 countries and operate to the “highest degree of ethical standards”.
The fine is three times the previous record penalty of £7.8 million imposed by HM Revenue & Customs last year on a money service bureau in London.
HMRC said that it had identified “significant breaches of the regulations [by MT Global]” between July 2017 and December 2019.
The breaches related to risk assessments, record keeping and “fundamental customer due diligence measures”. It accused the business, run by Mazhar Hussain, 60, a Canadian, of flouting the rules on money laundering.
Mr Hussain, who is also a driving school director, could not be reached for comment. His company’s phone number was “not in service”.
Nick Sharp, a deputy director at HMRC’s fraud investigation service, said: “Businesses who fail to comply with the money laundering regulations leave themselves and the UK economy open to attacks by criminals.
“Money laundering is not a victimless crime. Criminals use laundered cash to fund serious organised crime, from drug importation to child sexual exploitation, human trafficking and even terrorism.
“We’re here to help businesses protect themselves from those who would prey on their services. That includes taking action against the minority who fail to meet their legal obligations under the regulations as this record fine clearly shows.”
Questions remain over how the company will pay the fine. The most recent accounts for MT Global recorded net assets of £154,000.
Lawyers for MT Global said that the company had “lodged an appeal to the tax tribunal following HMRC’s decision”.
The Times reported last month that the UK had four times more money transfer outlets than France, Germany, Spain, Italy and the Netherlands combined.
The authorities believe that the outlets are exploited by organised crime gangs and terrorists to move £1 billion in cash every year.
By Sean O’Neill, The Times, 8 January 2021
Read more at The Times
Read the HMRC statement here
This story is applicable to any business regulated for AML purposes by HMRC. Failure to perform risk assessments and failure to obtain KYC were the two key drivers – both things automated by RiskScreen OnBoard. Contact us for more information: https://www.riskscreen.com/contact-us/
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