Yachts and Motor Boats

My wife and I went into Pwhlleli on the bank holiday weekend to visit the Land & Sea Food festival down at the Marina.  It was a lovely day and having sampled the fayren on offer, we decided to have a walk around the Marina area and look at the boats. This being the real start of the tourist season the tractors were busy taking boats to and from the water, some luxury, others more modest.

We had a wander around the boats for sale and I was marginally surprised by how expensive they all were. A small gleaming white speedboat that my wife took a shine to was priced at GBP15,950 whereas a more sturdy fishing boat that I could happily spend my retirement years on cost a whopping GBP65,000, and there were many more in besides, and a good number of similar boatyards.

After a few moments dreaming of winning the national lottery, or having a job that would pay enough to purchase one of these marvellous and beautiful pieces of engineering, I began to wonder about the process of buying and selling one of them.

The businesses that sell these items are clearly within the definition of a High Value Dealer (HVD) and could be subject to the Money Laundering Regulations 2007. They state that an HVD can accept cash payments of whatever figure, but that those who accept a cash payment in excess of €15,000 (about GBP 12,500) or a series of lower, linked payments to that threshold, is required by law to comply with all the implications that the leglislation brings with it. 

These include undertaking appropriate due diligence on customers, completing a risk assessment, appointing a nominated officer, putting an anti money laundering policy and system in place to identify and prevent, and then report suspicious transactions to the National Crime Agency (NCA), keep records for 5 years, register with Her Majesty’s Revenue and Customs (HMRC), pay an annual fee, and report any changes within the registration year. It also includes ensuring that all the staff are aware of the money laundering issues and are continually kept up to date.

Even if you only occasionally accept cash payments at or above this threshold, you are still required by law to comply, even if you are selling to your best friend or a fmily member you have known for years.

If you have made a policy in your business that under no circumstances will you accept these large cash payments, you must have a written policy that says this and ensure all your staff and customers are aware of it.  In addition, if you are unsure that you will do business like this and decide not to register, you must refuse such payments and insist on payment by some other means or risk a heavy penalty.

Don’t forget also that the 4^th EU Directive on Money Laundering has been agreed and will be in force soon, and that reduces the cash payment threshold to €10,000 or GBP 7,500 and I will explore the ramifications of this topic more in my next blog.