ECSH72000 – Regulations 67 and 68 – Requests for support to and from foreign authorities
Introduction
The Money Laundering,
Terrorist Financing and Transfer of Funds (information on the Payer)
Regulations 2017
(MLR 2017) contain powers known as ‘information
sharing gateways’ that allow us to share information that the duty of confidentiality
under Commissioners for
Revenue and Customs Act 2005 (CRCA 2005), or data protection legislation,
would normally prohibit us from sharing.
Regulation 67 MLR 2017 and regulation 68 MLR 2017 are part of the
information gathering powers and provide the following:
Regulation
67 allows HMRC to exercise its powers under regulation 66 to give effect to a
request made by a foreign authority if they meet the definition in the section
below ‘What is a foreign authority?’.
Regulation
68 allows HMRC to make a request for assistance from a foreign authority in
obtaining specified information or documents, if two conditions are met. Those
conditions are:
The
documents or information are reasonably required in connection with our
supervisory function under MLR 2017 and are not available in the UK.
We
have reason to believe such documents or information may be held by a person
who is within the jurisdiction of that foreign authority.
Regulations 67 and 68 only relate to using
information notice powers under regulation 66. Other gateways exist for sharing
information and intelligence with foreign authorities and you should consult
the EC-S information gateway team if you need to do so.
The sharing of information that we hold or information
that we have received from a foreign authority, is subject to wider data
protection law and all such requests must be routed through the EC-S information
gateway team to ensure full compliance with the law and HMRC policies further
outlined in the Information Disclosure
Guide.
What is a 'foreign authority' for the purposes of regulations 67 and 68?
Requests under these regulations can only be
made by, or to, a foreign authority that is an authority in a territory which
is not part of the United Kingdom and which exercises functions provided for in:
the fourth money laundering
directive;
the funds transfer
regulation; or
the law of a third
country equivalent to those provided for in the fourth money laundering
directive or the funds transfer regulation.
Sharing information with a foreign authority
Any disclosure of information to, or from, a
foreign authority must be dealt with in accordance with UK data protection law.
It must be proportionate to the request, suitably specific and limited to the
precise requirement.
Handling requests from
foreign authorities under regulation 67
Any such request must
be handled by the EC-S information gateway team.
The information EC-S can
supply in response to a request under this regulation is restricted to the
powers HMRC has under regulation 66 ‘Power to require information, access or
documents’. See ECSH71500. For other ways of
exchanging information see ECSH12000.
For HMRC to accept any
request made under regulation 67 from a foreign authority it must:
Be for a person
who is or was a relevant person, payment service provider or connected
person.
From a foreign
authority (as defined above).
Provide us with
the details we would need to follow our own guidance in issuing a
regulation 66 information notice (See ECSH71500).
Explain why the documents or information
are reasonably required and how they are available in the UK; and
Show why it is believed that such
documents or information may be held by a person who is in the UK.
An examination of the
request should take the following considerations into account. These are either
allowed by regulation 68 to be taken into account, or a policy decision:
Must
be for a sector HMRC supervises.
Whether
an equivalent level of assistance from the foreign authority requesting
support would be given.
Whether
the request concerns laws and requirements that are existent and aligned
with the UK.
The
seriousness of the case and its impact on persons in the UK.
Be
from a country that the UK recognises.
Be
from a country that to release such information to would not endanger the human
rights of an individual.
Human rights obligations
mean that we should not provide information which might lead to the death
penalty or torture in another country. The EC-S information gateway team have the
expertise, including ensuring that relevant data protection points are
considered and addressed.
HMRC is not legally
bound to execute the request when it is received from the foreign authority and
can politely reject it. HMRC may decide not to exercise its powers unless the
foreign authority undertakes to:
Contribute
towards the cost.
Comply
with conditions set out in relation to the information and documents
provided.
Making requests to a foreign authority under regulation 68
We should not seek to
make multiple minor requests unnecessarily or where outcomes will not be
significant. However, we should consider making requests where the importance
and potential outcomes of a response could be significant in exercise of our
functions as a supervisory authority.
A request must only be
made through the EC-S information disclosure gateway in accordance with HMRC Security and
Information management guidelines.
Furthermore, a request to other
authorities can only be made when the following conditions have been met:
The documents or information reasonably
required by EC-S, are not available in the United Kingdom; and
EC-S has
reason to believe that such documents or information may be held by a person
who is in the jurisdiction of the foreign authority.
Requests must only be made where it is
proportionate, we use the same criteria for requests under regulation 68 as we
do in regulation 66 – for further guidance please see ECSH71500.
As not all countries
have an equivalent regime to the UK, in particular not all countries supervise
the same sectors or supervise them in the same way as in the UK. This should be
considered when deciding whether to make a request.
Officers should also be
mindful of diplomatic relations and any human rights issues in the country and
the impact that a request may have. To request information involves sharing
information, and we should not provide information which might lead to human
rights implications such as the death penalty or torture in another country.
An EC-S
request to a foreign authority can only be made, where the request is in
connection with HMRC’s function as a supervisory authority under MLR 2017.
A foreign authority is not legally bound
to respond and is entitled to decline our request. They may also set conditions
to restrict the purposes for which we may use the information.
Where a foreign authority responds to a
request, unless the foreign authority agrees otherwise, we may only use the
information received:
For the
purposes for which it was requested (e.g. to conduct compliance
activity), or
For the purposes of
proceedings as a result of breaches of relevant requirements of MLR 2017 (e.g.
issuing penalties or other sanctions) or anything following on from such action
(e.g. an appeal).
Where the foreign authority consents,
the information and documents can appropriately be used for any purpose HMRC
deem necessary and the limitations outlined above no longer applies.
Regulation 68 must not be used to lobby
a foreign authority to initiate investigations or change the course of its
actions, as this would be unlawful, as it would not meet the criteria set out
in regulation 68.
Previous page
