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Small firms may gain exemption from money laundering rules

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A review of the rules governing checks for money laundering could see the very smallest firms granted exemption from the regulations.

The Government has been consulting on changes to the Money Laundering Regulations 2007.

In its response to the review, the Treasury has said that it welcomes proposals to exclude businesses with VAT-exclusive turnovers of below £13,000 from the checks, or at least to reduce the requirements placed on them.

The new consultation document also suggests that the ‘tick-box’ approach adopted by some firms to the regulations should be replaced with a more risk-based policy.

Instead of a blanket set of guidelines and checks, firms would be allowed to make their own assessment of the risks they face and to implement their own systems and controls according to circumstance and the level of that risk.

Lord Sassoon, the commercial secretary to the Treasury, said: “It is essential that the UK’s money laundering regulations make the UK a hostile environment for money laundering and terrorist finance. But improvements can be made and we must consider the impact of these regulations on British business.

“We believe that we can make the regulations more effective and proportionate by removing a range of criminal penalties on all businesses and by lifting the burdens on the smallest businesses. This will modestly reduce the burden on business, without damaging the fight against money laundering.”

The consultation closes on 30 August.