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Money laundering rules will affect dealers, warns RMI

Car dealers could face fines of up to £5,000 if they fail to comply with anti-money laundering rules coming into force at the end of 2003, warns the RMI.

Louise Wallis, RMI business development advisor explains: “The second EU Money Laundering Directive (2001) is about to pass into UK law. This legislation is going to affect all motor dealers as it is specifically targeted at businesses which deal in high-value goods like cars.”

To continue taking payment for goods in cash sums above £10,000 businesses will need to register with HM Customs and Excise (HMCE). The regulations will also cover linked transactions. Wallis said: “If a customer buys a car and pays a cash deposit of £5,000 and later the balance of £7,000 in cash, the transaction would fall under the legislation, though it will be acceptable if the deposit is paid in cash and the balance by cheque.”

Payments made entirely via cheque, banker's draft, or credit/debit card will be unaffected. The directive becomes UK law in late 2003, and HMCE are to be given powers to inspect company records and visit businesses to ensure that they are complying with the regulations.

Wallis describes how to register: “Dealers should contact the HMCE to obtain a registration pack and money laundering guide (MLR6; MLR7). The registration certificate should arrive within 45 days, but no cash transactions over £10,000 should be accepted until it has arrived.”

Registration will not be mandatory, but dealers that choose not to enrol will need to demonstrate that they maintain a clear policy on cash payments.

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