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The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

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25.—(1) The supervisory authority must determine whether the additional measures taken under regulation 20(4) by a relevant parent undertaking which is an authorised person or a qualifying parent undertaking (as defined by section 192B of FSMA(1)) are sufficient to handle the risk of money laundering and terrorist financing effectively.

(2) If the supervisory authority does not consider the measures referred to in paragraph (1) to be sufficient, it must consider whether to direct the relevant parent undertaking—

(a)not to enter into a business relationship with a specified person;

(b)not to undertake transactions of a specified description with a specified person;

(c)to terminate an existing business relationship with a specified person;

(d)to cease any operations in the third country.

(e)to ensure that its subsidiary undertaking—

(i)does not enter into a business relationship with a specified person;

(ii)terminates an existing business relationship with a specified person; or

(iii)does not undertake transactions of a specified description with a specified person, or ceases any operations in the third country.

(3) A direction issued under paragraph (2) takes effect—

(a)immediately, if the notice given under paragraph (6) states that that is the case;

(b)on such date as may be specified in the notice; or

(c)if no such date is specified in the notice, when the matter to which the notice relates is no longer open to review.

(4) For the purposes of paragraph (3), a matter to which a notice relates is still open to review if—

(a)the period during which any person may refer the matter to the appropriate tribunal is still running;

(b)the matter has been referred to the appropriate tribunal but has not been dealt with;

(c)the matter has been referred to the appropriate tribunal and dealt with but the period during which an appeal may be brought against the appropriate tribunal’s decision is still running; or

(d)such an appeal has been brought but has not been determined.

(5) Where the FCA proposes to issue a direction under paragraph (2) to a PRA-authorised person or to a person who has a qualifying relationship with a PRA-authorised person, it must consult the PRA.

(6) If the supervisory authority issues a direction under paragraph (2) it must give the relevant parent undertaking (“A”) a notice in writing.

(7) The notice must—

(a)give details of the direction;

(b)state the supervisory authority’s reasons for issuing the direction;

(c)inform A that A may make representations to the supervisory authority within such period as may be specified in the notice (whether or not A has referred the matter to the appropriate tribunal);

(d)inform A of when the direction takes effect; and

(e)inform A of A’s right to refer the matter to the appropriate tribunal.

(8) The supervisory authority may extend the period allowed under the notice for making representations.

(9) If, having considered any representations made by A, the supervisory authority decides—

(a)to issue the direction, or

(b)if the direction has been issued, not to rescind the direction,

it must give A notice in writing.

(10) If, having considered any representations made by A, the supervisory authority decides—

(a)not to issue the direction,

(b)to issue a different direction, or

(c)to rescind a direction which has effect,

it must give A notice in writing.

(11) A notice under paragraph (9) must inform A of A’s right to refer the matter to the appropriate tribunal.

(12) A notice under paragraph (10)(b) must comply with paragraph (7).

(13) If a notice informs A of A’s right to refer a matter to the appropriate tribunal, it must give an indication of the procedure on such a reference.

(14) For the purpose of this regulation—

(a)“appropriate tribunal” means—

(i)the Upper Tribunal, in the case of a direction issued by the FCA;

(ii)the First-tier or Upper Tribunal, as provided for in regulation 99, in the case of a direction issued by the Commissioners;

(b)“specified” means specified in the direction.

(1)

Section 192B was inserted, with the rest of Part 12A, by section 27 of the Financial Services Act 2012 (c.21).

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