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June 2008

Money Laundering Regulations

In December 2007, the Money Laundering Regulations (MLR) were significantly extended and, as drafted, would have brought interim management – and recruitment generally – into a heavily regulated and controlled regime. The December 2007 Regulations apply to any individual or agent who arranges for a person to act as a director, company secretary or partner in a business; and deems them to be a “Trust and Company Service Provider” (TCSP). All of this would require a significant administrative overhead for companies, and could well have been reflected in an increased cost of recruitment overall.

Interregna, through its active involvement with the Interim Management Association, and thanks to strong lobbying from the REC’s lawyer, Bryan Boese, can now report a resolution to the situation. Several meetings with the Treasury and HMRC have resulted in some clarification: TCSP’s will be defined as bodies who execute the strict formalities of securing the appointment of directors- for example submitting forms to Companies House. The broader activities of providing interim managers/directors and search and selection, will not now be bound by MLR regulation.

In the next few weeks, we are expecting formal guidance from the Treasury to clarify the position, but the issue does seem to have been resolved, and it’s definitely “business as usual”.

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