ECSH23500 | The Counter Terrorism Act 2008

Schedule 7 to the Counter-Terrorism Act 2008 (CTA 2008) gives powers to HM Treasury (HMT) to issue directions to firms in the financial sector in relation to:

• Customer due diligence.

• Ongoing monitoring.

• Systematic reporting.

• Limiting or ceasing business.

The only businesses within HMRC supervised population that these powers relate to are money service businesses (MSBs), as they fall under the definition of the financial sector. CTA 2008 includes powers to request information or documents and powers of entry to premises and inspection of documents.

A direction will contain specific legal requirements imposed by HMT on businesses in the financial sector in relation to their transactions or business relationships with:

• A person carrying on business in a country.

• The government of a country.

• A person resident or incorporated in a country.

HMT may give a direction if one or more of the following conditions are met in relation to a country.

• The Financial Action Task Force (FATF) has advised that measures should be taken in relation to the country because of the risk of terrorist financing or money laundering activities being carried on either in the country, by the government of the country, or by persons resident or incorporated in the country.

• HMT reasonably believe that there is a risk that terrorist financing or money laundering activities are being carried on either in the country, by the government of the country, or by persons resident or incorporated in the country and that this poses a significant risk to the national interests of the UK.

• HMT reasonably believe that the country is involved in developing, producing or facilitating the development or production of nuclear, radiological, biological or chemical weapons and that this poses a significant risk to the national interests of the UK.