HIGH VALUE DEALERS IN SPOTLIGHT AS HMRC RAMPS UP AVERAGE MONEY LAUNDERING FINE BY 166%

Published : 7 years ago, on 30/11/2017

• Penalties for sectors including luxury goods such as cars, jewellery and jets totalled £1.1m last year compared with just £560,000 a year earlier
• Experts welcome HMRC’s deterrent use of tougher financial penalties in areas where use of Suspicious Activity Reports (SARs) is still incredibly low

The value of fines being handed out to firms including art, antique and private jet dealers has more than doubled in a year, anti-money laundering and Big Data specialists Fortytwo Data revealed today¹.

The average penalty issued by HMRC rocketed 166% from £484 to £1,290 in 2016/17 as the number of fines overall dropped 23% from 1,153 to 886.

The total value of fines rose 105% from £558,000 in 2015/16 to £1,143,000 in 2016/17, research shows.

Dealers selling high-end jewellery, art, antiques, boats, cars and even private jets are among those overseen by HMRC as a AML supervisor.

Sectors the department supervises include money service business, high value dealers, trust or company service providers, unsupervised accountancy service providers and estate agents³.

HMRC is responsible for policing the way businesses in these sectors meet their anti-money laundering obligations and issuing fines when they don’t.

These business, as well as banks and other financial service firms, can file Suspicious Activity Reports (SARs), to raise red flags over possible criminal activity but reporting is still very low.

There were only 45 SARs filed by high value dealers in 2016/17 while auction houses submitted just NINE². Estate agents registered 536 and trust/company service providers filed 72.

Year	2015/16	2016/17
No. of HMRC Fines	1153	886
Total HMRC Fines	£558,000	£1,143,000
Av. Value of Fine	£484	£1,290

Julian Dixon, CEO of Fortytwo Data, said: “I hope the dramatic rise in the value of fines is a sign that HMRC is getting tough on the weak links in our money laundering defences.

“High-value dealers and those handling large transactions, particularly in unregulated industries, are a money launderer’s dream.

“Awareness of money laundering risks will be low, profits are high which encourages those who are suspicious to turn a blind eye and criminals are able to launder huge amounts of money in a single, seemingly inn not expect a light touch.

“If HMRC has been an effective AML supervisor during this period, then the fall in the number of penalties issued is also encouraging and may demonstrate their tactics are working.”