ECSH82625 - Factors to consider when imposing a financial penalty

When deciding whether to impose a financial penalty and/or any other sanction, decision-makers (DM) must take into account all relevant factors including, where appropriate, those in ) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). Regulation 83(1) MLR 2017 considerations include:

  • The gravity and the duration of the contravention or failure.
  • The degree of responsibility of a person or business, (see ECSH82575 for the definition of a person).
  • The financial strength of the business/person.
  • The amount of profits gained, or losses avoided, by the business/person.
  • The losses for third parties caused by the contravention or failure.
  • The level of co-operation of the business with the Commissioners (HMRC).
  • Previous contraventions or failures by the business/person.
  • Any potential systemic consequences of the contravention or failure.

In addition, in deciding whether the business/person has contravened a relevant requirement, the DM must consider whether at the time of the alleged breaches the business/person followed any relevant guidance, that was in place at the time of the contravention. Relevant guidance includes guidance issued by HMRC and approved by the Treasury, guidance issued by the Financial Conduct Authority (FCA) and guidance issued by any other supervisory authority or appropriate body approved by the Treasury. Therefore, the DM must consider if the relevant person has indeed acted consistently with HMRC guidance. This factor will impact on whether to impose any penalty and if a financial penalty is appropriate then it may also be a consideration as to the value of the penalty. 

A financial penalty cannot be imposed for a contravention of a relevant requirement if the DM is satisfied that the business/person took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with. See ECSH82525.

If issuing more than one sanction, the timing and order of the sanctions will vary from case to case, dependent upon the circumstances. Whilst all sanctions may not be issued at the same time, all proposed measures should be considered at the same time, if possible.   

The DM should consider whether the penalty should be imposed in full on in part on an officer or officers or apportioned between the business and an officer or officers, see ECSH82810.