UT/2023/000092 - [2024] UKUT 00035 (TCC)

The effect of the requirements now imposed on the firm’s existing business, mean customers can only get the money in their account back with the supervision of a Skilled Person. In the light of AML deficiencies, the Authority consider that payouts to existing persons, but without the supervision of a Skilled Person, would risk payments which facilitate financial crime.

In his evidence, Mr Jacklin spoke to the detrimental impact and frustration this restriction had on Nvayo’s customers in terms of their being able to access their accounts as they would normally expect and the knock-on effect to Nvayo’s relationship with its customers. The exception that redemptions could be made with the supervision of a Skilled Person did not in his view address that concern because of the delay that would involve.

I do not doubt that these are genuine concerns which are felt by Nvayo and its existing customers but at this stage of the analysis the particular question I must focus on is whether I can be satisfied that suspending the restriction on existing customer redemptions would not prejudice the persons intended to be protected. As discussed, in the context of AML risk, that constitutes the wider public.

The issue here is whether the evidence Nvayo have provided enables the tribunal to be satisfied that enabling customer redemptions without the supervision of the Skilled Person would not prejudice the concern of a risk that the payments had or would facilitate financial crime. To assess that evidence it is necessary to go into more detail into the Authority’s review of the ten client files which took place in October/November 2023 and which led to the issue of the FSSN.

As mentioned, the Authority requested 10 files for review. Nvayo duly provided these on 23 October 2023 which the Authority then assessed against the MLRs and Joint Money Laundering Steering Group Guidance in relation to risk assessments, due diligence, ongoing monitoring, transaction monitoring and suspicious activity reporting. The reviews for the ten customers were appended to the FSSN.

Before referring to some of the detail of those I should mention that I did not understand Nvayo to be arguing, at least for the purposes of this application, that the underlying factual information set out in the reviews was inaccurate. In other words, if the review maintained a particular document stated a particular thing, or that a document was not in the particular client file, it was not suggested to me that that was factually wrong. Rather Nvayo made various other points (considered below) querying the significance the Authority attached to the relevant points of non-compliance arguing they were essentially of an administrative nature and highlighting the limited scope of the review (both in terms of the numbers of files and the scope of information looked at) and therefore the wider inferences that could be drawn from it.