AML 4 MSB. What is a Money Service Business?

Last post, we covered definitions of anti money laundering (AML) and terrorist financing (TF), this week - what is a Money Service Business (MSB).

Her Majesty’s Revenue and Customs have us covered here. From the guidance:

“1.29 “Money service business” is the term used to describe the following activities, carried out by way of business in the UK:

  • acting as a currency exchange office (a bureau de change)

  • transmitting money or any representation of money by any means (money remittance)

  • cashing cheques payable to your customer (third party cheque cashing)”

Simple as that . One note worth making is that all three of the products above are available as “agent services”. I used to recruit retailers to offer money remittance, for example. Those retailers were registered as agents with HMRC and were obliged to abide by The Regulations.

If you are carrying on one of the businesses above in the UK, either under your own auspices, or as an agent, then you need to be registered. Unsure? Get in touch. We’ll let you know whether you need to register or whether you need to check that your principal has registered you. (Free of charge.)

If you are transmitting money, then you also need to be registered with the Financial Conduct Authority (FCA) under the Payment Services Regulations 2017. Lucky you! Two supervisors.

Now - if you are authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (FSMA), but also carry on one of the businesses in 1.29 above, then you are supervised only by FCA, and should probably stop reading now.

Penalties and Sanctions

If you are supervised by HMRC, then understand that they have the power to levy civil penalties AND start criminal prosecutions for non-compliance. That could result in unlimited fines and prison. That’s not for doing any money laundering or anything, that's for not following the regulations. If you are actually upto something, then things get even heavier.

Short version? If you are in scope, get registered. Pronto. By all means get in touch if you want help or advice. It costs nothing to talk.

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