In the past, the term ‘money laundering’ was applied only to financial transactions related to the likes of Al Capone and serious, organised crime such as terrorism.
If you have recently tried to open a bank account you will be very well aware of the extensive checks and balances required by the Finical Services Authority to ensure that all monies have a traceable source.
The government has recently introduced tough new rules to crack down on money laundering and the proceeds of crime. The new rules affect a wide range of people and this could have an effect on patients wishing to pay cash for high-cost dental treatments.
The definition of money laundering has been expanded to include actions such as tax evasion and false accounting. As a result, the illegal activity of money laundering is now recognised as potentially practised by individuals, small and large businesses. This will include patients who pay cash because they are spending money earned ‘cash-in-hand’ and not declared for tax purposes.
This need not be a concern for small amounts of money, however cash payments for cosmetic dentistry running into many thousands of pounds should be questioned in the context of the culture and beliefs of your patients and two key pieces of legislation; the Proceeds of Crime Act 2002 (The Act) and the Money Laundering Regulations 2003 (The Regulations).
The Act re-defines money laundering and its offences, and creates new mechanisms for investigating and recovering the proceeds of crime. The Regulations require those affected to report knowledge or suspicion of money laundering. Certain businesses have been affected by anti-money laundering requirements for some time, like banks and other financial institutions. These businesses have been required to put in place specific arrangements to prevent and detect money laundering.
The new regime requires many more businesses to introduce procedures to combat the crime. The legislation relates to anyone in what is termed as the ‘regulated sector’, which includes but is not limited to dealers in high-value goods whenever a transaction involves accepting a total cash payment equivalent to £10,000 or more.
It is not simply the more obvious examples of suspicious activities that have to be reported. The government has insisted upon there being no minimum cash level within the legislation. This means that very small proceeds of crime have to be reported to the National Criminal Intelligence Service (NCIS), a government body that works on behalf of all UK law enforcement agencies.
Now that most patients prefer to pay for their treatment by card or cheque, the amount of cash being taken in practices has dropped drastically. This is most welcome, as it makes cashing-up easier and prevents practices from needing to put measures in place to manage the considerable risks linked to holding and banking large amounts of cash.
With legislation in place to make it more difficult for people to spend monies that are not traceable for tax purposes, it makes perfect sense for practices to place a blanket limit on cash payments from individual patients for security reasons. In this way you avoid situations where ill feeling results from your refusal to accept a large cash amount from any one individual.
The first Receptionist Network issue has been well received by the receptionists on our emailing list. All receptionists are invited to use this medium to share their thoughts and concerns with likeminded colleagues – please send your news and views to [email protected] If you would like to join the network you can enroll through the DRC website at dental-resource.com.