The OFT will become a supervisory authority on 15 December 2007 when the regulations come into effect. Businesses supervised by the OFT are consumer credit lenders who are not authorised by the FSA and estate agents. Monitoring and enforcement powers will be shared with local authority Trading Standards Services (TSS) under arrangements to be negotiated in coming months.

The OFT's guidance alerts business to their obligations under the regulations, which are aimed at reducing their vulnerability to being used for money laundering. Firms are required to:

• verify customers’ identity and nature of business before entering into business relationships or transactions
• train staff in the procedures and laws relating to anti-money laundering
• keep records of customer identity and business relationships for five years, and
• report suspicious activity to the Serious Organised Crime Agency.

These regulations implement the Third Anti Money Laundering Directive and reflect the UK Government's strategy to combat money laundering and financing of terrorism. Sanctions for failure to comply with the regulations include civil penalties imposed by the OFT or prosecution resulting in fines or a prison term of up to two years.

Ray Hall, OFT Director of Markets and Projects, said that the OFT’s key aim at this stage is to ensure that businesses it supervises are aware of their obligations under regulations.

“Although these businesses already have to comply with anti-money laundering legislation, until now they have not been supervised. We are happy to share monitoring and enforcement powers with local authority Trading Standards Services and will continue to work closely with them, to implement a supervisory regime which is effective,” Hall said.

Related links

• Office of Fair Trading
• Money Laundering Regulations 2007: core guidance