How to register for anti-money laundering supervision

What is Anti-Money Laundering (AML) supervision?

If your business is a Money Service Business (MSB), you are legally required to register with His Majesty's Revenue and Customs (HMRC) for Anti-Money Laundering (AML) supervision before you start trading. This is a crucial step to ensure your business is not used to 'clean' money from criminal activities. Getting this right from the start protects you, your customers, and the wider financial system.

Is your business a Money Service Business?

You are likely running an MSB and need to register if your business activities include any of the following:

• Currency Exchange: Operating as a bureau de change.
• Money Transmission: Transferring money on behalf of customers to another person or business.
• Cheque Cashing: Cashing cheques for customers.

Even if these services are only a small part of your overall business, you must still register with HMRC for supervision.

How to register with HMRC

The registration process is thorough and requires you to prove you are a responsible business owner. Follow these steps to get registered:

1. Confirm you need to register: Double-check the specific requirements on the GOV.UK website to be absolutely certain your business activities fall under the regulations.
2. Appoint a Nominated Officer: You must designate a person within your business (this could be you, if you're a sole trader) who is responsible for your AML compliance. They will be the main contact for HMRC and the National Crime Agency.
3. Prepare for the 'Fit and Proper' Test: HMRC will assess whether the people running the business are suitable. This involves a criminal record check for all beneficial owners, partners, and directors. Certain unspent criminal convictions (particularly for financial crimes) will mean your application is rejected.
4. Gather your information: Before starting the online application, make sure you have all the necessary details to hand, including:

• Your business's registered name, address, and Companies House number (if applicable).
• Personal details of all directors, owners, and senior managers.
• The address of every premises where you will conduct MSB activities.
• An estimate of your turnover from MSB activities for the next 12 months.

Complete the online application and pay the fee: The application must be completed on the GOV.UK website. You will also need to pay a registration fee for each premises you operate from. This fee is non-refundable, even if your application is unsuccessful.

Your ongoing responsibilities

Registration is just the first step. Once you are approved, you have a legal duty to have systems in place to prevent money laundering. This means you must:

• Create AML policies: You need a written policy and procedures that detail how you assess risks and manage compliance.
• Conduct Customer Due Diligence: You must verify the identity of your customers before carrying out transactions. This is often called 'Know Your Customer' (KYC).
• Train your staff: Ensure anyone involved in transactions understands the law and knows how to spot and report suspicious activity.
• Keep detailed records: You must keep records of all transactions and customer identity checks for at least five years.
• Report suspicious activity: If you have any suspicion that a transaction is related to criminal activity, you must submit a Suspicious Activity Report (SAR) to the National Crime Agency.

Top Tip: Apply Early! The approval process for AML supervision can take several weeks, or even months. You cannot legally begin trading as a Money Service Business until you are fully registered. Submit your application well in advance of your planned opening date to avoid any delays.