S L Wines Ltd v Revenue & Customs (MONEY LAUNDERING REGULATIONS 2007)

MONEY LAUNDERING REGULATIONS 2007 � wholesaler of spirits in bond for cash � high value dealer � whether in breach of the Regulations � held yes � whether maximum penalty of �5,000 imposed appropriate � held no, because maximum penalty imposed on the basis that the breach was deliberate and it was not proved that it was � held that the imposition of a penalty was appropriate and the amount was fixed at �2,500 � appeal allowed in part

Andrew Scott, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents

Regulation 42 MLR 2007 (as amended) gives power to HMRC in respect of a high value dealer (SLW has been at all material times a high value dealer) to impose a penalty of such amount as it considers appropriate on a high value dealer who fails to comply with any requirement in any of the following regulations of the MLR 2007: regs. 7(1), 7(2) or (3), 8(1) or (3), 9(2), 10(1), 11(1), 14(1), 15(1) or (2), 16(1), 16(2), 16(3) or (4), 19(1), 19(4), 19(5) or (6), 20(1), 20(4) or (5), 21, 26, 27(4) or 33.

For these purposes, �appropriate� means effective, proportionate and dissuasive (reg. 42(1C) MLR 2007).

The original decision to impose the penalty included a statement indicating that SLW had breached regulations 7, 8(1), 14(1), 19(1), 20(1) and 20(2) MLR 2007. The review letter indicated that Officer Paton considered that SLW had been in breach of the regulations identified by Officer Blair in the original decision and �other identified breaches� and that, in summary, SLW had �failed to establish and maintain appropriate and risk-sensitive policies and procedures in accordance with the requirements of a High Value Dealer�.