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First-tier Tribunal (Tax)
You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Trainor (t/a Best Rate Bureau) v Revenue & Customs [2009] UKFTT 117 (TC) (27 May 2009)
URL: http://www.bailii.org/uk/cases/UKFTT/TC/2009/TC00085.html
Cite as: [2009] UKFTT 117 (TC)
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BUREAUX DE CHANGE
Bureaux de Change
- This is an appeal by Rory Trainor, who trades as a money services service business using the name Best Rate Bureau, in Newry, County Down. The business undertakes the purchase and sale of euros in exchange for sterling, and the cashing of third party cheques. Mr Trainor challenges the imposition on him of two penalties, each of £2,500, for breaches of regulations 4(3)(a) and 6(2)(b) of the Money Laundering Regulations 2003. Those were the regulations in force at the time the penalties were imposed; they have since been replaced by the 2007 Regulations.
- Mr Trainor asked, before the hearing began, that it be postponed because a member of the staff of the solicitor he had instructed had, he said, telephoned him the evening before to say that the solicitor was unable to attend (for a reason which was not given to Mr Trainor) and that he should attend himself to ask for a postponement. I noted that the hearing of the appeal had already been postponed once, at Mr Trainor's request, because of the absence of his only employee on holiday, that the solicitor had, Mr Trainor told me, been instructed only two weeks previously, even though Mr Trainor had some five months' notice of the hearing, and that the solicitor had not advised the tribunal of his interest. I concluded in those circumstances that it was not appropriate to postpone further the hearing of an appeal which was against a review decision dated as long ago as October 2007, and I refused Mr Trainor's application. He then represented himself.
- It seemed at first that Mr Trainor was disputing his liability to the imposition of the penalties, and I heard the evidence of the officer who had imposed them, Roisin McAnarney, and of another officer who had assisted her, Catherine Mackel. They described several visits which had been made to Mr Trainor's business premises when several failings had been identified. Mr Trainor did not concede some of the failings but did accept that others were correctly identified and that his record-keeping, at the relevant time, was not as good as it should have been. He assured me that it had since improved and, though I am not able to say whether or not that is right, I am satisfied from the information I had that Mr Trainor's failings are limited to the quality of his record-keeping; it did not seem to me that he was knowingly involved in deliberate circumvention of the underlying purpose of the Regulations.
- That, however, is not an excuse. The verification and record-keeping requirements imposed on dealers such as Mr Trainor are intended to make it more difficult for those who use their services for the purpose of money laundering to do so, and to make it easier for the enforcement authorities to trace them and the money which has been laundered if, despite the safeguards, they succeed. Scrupulous compliance with the verification and record-keeping requirements imposed on money services businesses is, therefore of considerable importance, and failure to comply is a serious matter deserving the imposition of a significant penalty. The maximum allowed by the 2003 Regulations for each offence is £5,000.
- The Commissioners have internal guidance for those officers whose task it is to impose penalties in accordance with the Regulations, which Mrs McAnarney told me she had considered. The guidance suggests that, unless there are significant aggravating or mitigating factors, a person such as Mr Trainor should, on the first occasion a breach of the Regulations is detected, receive a warning; on the second, he should be subject to a penalty of £1,000 and on the third occasion to a penalty of £2,500. Mr Trainor had in fact received two warnings, and on the third occasion on which breaches were found, two penalties of £500 each for breaches of regulations 4(3)(a) and 6(2)(b) were imposed.
- I am satisfied from what he told me that Mr Trainor's is a relatively small business handling transactions with a value of about £1.5 to £2 million per year, and that most of the transactions he handles, both in number and in value, are small, consisting of currency conversions for tourists with little or no risk that money laundering is being undertaken. Those factors count in Mr Trainor's favour. On the other hand, it was clear that from time to time he handles large individual sums, that, even if one were to leave out of account those which Mr Trainor challenged, there were a great many individual instances of incomplete or even missing records, and that Mr Trainor has received two warnings and paid earlier penalties. Compliance with the regulations is not inherently difficult, requiring little more than careful attention to a simple routine.
- Against that background it seems to me that the Commissioners' suggested approach is reasonable, provided officers applying it take proper account of factors particular to the individual case. Mr Trainor has been treated more leniently than the guidance suggests on two previous occasions and it is difficult to see why he should be treated more leniently again. In these circumstances I do not think it appropriate to adjust either penalty. The appeal is, therefore, dismissed.
[2009] UKFTT 117 (TC)
TC00085
TAX
-and-
Sitting in Belfast on 28 April 2009
Richard Thyne, counsel, instructed by the Solicitor for HM Revenue and Customs for the Respondents
DECISION NOTICE
Signed
Tribunal Judge
Release date: 27 May 2009