A High-Value Dealer (HVD) under UK AML regulations refers traditionally to businesses handling transactions involving goods valued at €10,000 (approximately £8,500) or more, particularly in cash. However, recent changes expand this definition beyond cash transactions to include high-value digital transactions.
This means luxury interior designers, whose projects frequently involve large purchases such as bespoke furniture, artworks, or antiques, may now fall under HVD regulations regardless of payment methods.
Consequently, if your design projects or individual transactions surpass the €10,000 threshold, you are likely considered an HVD and must comply with comprehensive AML regulations, including client identity checks, sanctions screenings, and HMRC registration.
Yes. Historically, AML regulations were indeed focused on cash transactions, but due to the evolution of financial crime, regulators have expanded their scope to include electronic and digital payments.
High-value purchases made via bank transfers or card payments, especially common in luxury interior design, now also come under regulatory scrutiny.
If your transactions regularly involve sums over the €10,000 threshold, compliance with AML regulations, including customer due diligence and sanctions screening, becomes mandatory irrespective of the payment method used.
Customer Due Diligence (CDD) involves verifying your clients' identities using reliable documentation such as passports, driving licences, and recent proof of address like utility bills or bank statements.
It also includes assessing the risk of money laundering associated with each client.
For higher-risk clients—such as politically exposed persons (PEPs) or individuals from high-risk countries—Enhanced Due Diligence (EDD) must be performed, which involves additional checks to establish the client's source of funds and wealth. This comprehensive process ensures your business does not unintentionally facilitate money laundering.
Failing to register when legally required can lead to significant consequences, including substantial financial penalties and potential criminal charges. Operating without registration undermines your business credibility and could result in severe reputational damage.
HMRC can publicly list non-compliant businesses, which can negatively impact client relationships and future opportunities.
Ensuring timely registration demonstrates professionalism, protects your business from regulatory risk, and enhances client confidence.
You must periodically screen your clients against official sanctions lists maintained by organisations such as the Office of Financial Sanctions Implementation (OFSI).
Initially, this check should be conducted during client onboarding, and thereafter at regular intervals, especially during long-term engagements. Utilising automated sanctions screening software can streamline this process, providing regular updates to ensure continuous compliance.
Immediate reporting to OFSI is required if a potential sanction violation is detected.
Yes, compliance responsibilities can be effectively outsourced to third-party escrow and procurement services. These services manage client due diligence, sanctions checks, and transaction record-keeping on your behalf.
Engaging reputable escrow services, like us, significantly reduces the administrative burden, ensuring that compliance obligations are professionally managed.
AML regulations require detailed record-keeping for at least five years following the conclusion of each transaction or business relationship. Necessary records include client identification documents, transaction details (invoices, payment confirmations), evidence of sanctions screening, and risk assessments.
Good record management demonstrates compliance during audits by HMRC, protects against regulatory penalties, and safeguards against legal or reputational risks.
A Politically Exposed Person (PEP) is someone who holds or has held prominent public office, or who is closely associated with such individuals. PEPs pose a higher risk of money laundering due to their potential exposure to corruption or bribery.
Interior designers must identify PEPs during client due diligence and conduct Enhanced Due Diligence (EDD) to mitigate the elevated risks involved. Understanding and managing these risks are critical to AML compliance.
FF&E escrow services manage funds specifically for Furniture, Fixtures, and Equipment transactions. They securely hold client money in segregated accounts, handle payments to suppliers, conduct necessary AML checks, and provide clear transaction records.
By employing robust security measures and rigorous compliance processes, these services significantly reduce fraud risk and compliance burdens. While fees vary, many designers find them cost-effective due to the substantial reduction in administrative tasks, compliance responsibilities, and associated risks.
You can request a quote for your next project here.
If a client refuses or fails to provide essential documents for identity verification or proof of funds, AML regulations require that you must not proceed with the transaction. Such situations raise red flags about potential money laundering risks.
You should politely explain your regulatory obligations to the client, providing clear information about why the documentation is necessary. Maintaining professional integrity and adherence to regulations protects your business and ensures compliance with the law.
Anti-Money Laundering (AML) refers to the laws, regulations, and procedures aimed at preventing and detecting the process of making illicitly gained funds appear legitimate. AML frameworks require regulated entities to perform due diligence, monitor transactions, and report suspicious activity.
Money laundering enables organised crime, terrorism, corruption, and tax evasion by integrating illicit funds into the legitimate economy. Robust AML controls protect the integrity of the financial system and help prevent businesses from becoming unwitting participants in illegal activity.
In the UK, AML obligations are set out in the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, as amended, and enforced by bodies such as the Financial Conduct Authority (FCA) and HM Revenue & Customs (HMRC).
Q: Is AML the same as CDD?
A: No. CDD is one component of AML compliance, focusing on verifying customer identity and risk. AML covers the entire framework of prevention, detection, and reporting.
Q: Who must comply with AML regulations in the UK?
A: All businesses in regulated sectors, including financial services, legal, accountancy, property, and high-value goods dealing.
A Beneficial Owner is the natural person who ultimately owns or controls an entity, trust, foundation, or other legal arrangement. Ownership or control can be direct (e.g., holding shares in their own name) or indirect (e.g., through other companies, nominees, or arrangements).
The concept is central to the UK’s Money Laundering Regulations 2017 and linked to the People with Significant Control (PSC) register for companies and the Trust Registration Service (TRS) for relevant trusts.
Identifying the beneficial owner is critical to prevent money laundering, terrorist financing, tax evasion, and other financial crimes. Without transparency, complex structures can conceal the true parties behind a transaction or asset.
UK law requires regulated firms to identify, verify, and record the beneficial owner as part of their due diligence process.
Q: How is a Beneficial Owner different from a UBO (Ultimate Beneficial Owner)?
A: In most contexts, they mean the same thing. "UBO" is more common internationally, while "beneficial owner" is the UK statutory term.
Q: Is beneficial ownership information public?
A: For UK companies, details are on the PSC register. For trusts, the TRS is not public but can be accessed by certain authorities and, in some cases, interested parties.
Customer Due Diligence (CDD) is the set of checks required by law to confirm the identity of a customer and, where applicable, their beneficial owner. It is a core element of the UK’s Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, which apply to all regulated businesses.
CDD helps determine whether a customer presents a low, medium, or high risk, and informs whether further checks, such as Enhanced Due Diligence (EDD), are necessary.
CDD is a legal requirement for regulated firms and a key tool in preventing money laundering, terrorist financing, and other financial crimes. Without it, businesses risk facilitating illicit activity, incurring regulatory penalties, and damaging their reputation.
From May 2025, sanctions screening is also mandatory for certain high-value transactions, meaning CDD will need to incorporate checks against UK and international sanctions lists.
Q: How is CDD different from KYC?
A: In the UK, CDD is the formal legal requirement under AML regulations. KYC is a broader business term for knowing and understanding your customer, which often overlaps with CDD.
Q: When must I carry out CDD?
A: Before entering a business relationship, before carrying out an occasional transaction over the threshold, when you suspect money laundering or terrorist financing, or when you doubt the reliability of previously obtained identification.
Enhanced Due Diligence (EDD) is an intensified version of Customer Due Diligence (CDD), required when a customer, transaction, or circumstance presents a higher-than-normal risk. It involves obtaining additional information, carrying out more thorough verification, and increasing ongoing monitoring.
EDD is mandated by the UK’s Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 in certain situations, such as dealing with PEPs or clients from high-risk third countries.
EDD is a legal safeguard against being exploited for money laundering or terrorist financing. It goes beyond standard identity verification, providing a more detailed understanding of a customer’s background, ownership structure, source of funds, and source of wealth.
From May 2025, EDD also incorporates mandatory sanctions screening for certain high-value transactions, ensuring no sanctioned individual or entity is involved.
Q: How is EDD different from CDD?
A: CDD applies to all customers; EDD is additional and more detailed, applied only where there is higher risk.
Q: Can EDD be applied voluntarily?
A: Yes. Even when not mandated, firms may choose to apply EDD as part of a risk-based approach. DOS & Co., for example, carries out EDD on all paying parties for transactions of more than £10,000.
A High‑Value Dealer (HVD) is a business that trades in goods and accepts payments of €10,000 or more. Historically, this applied only to cash payments. Regulators now recognise that high-value transactions via bank transfers or digital payments also pose illicit finance risks and may require AML compliance actions similar to HVDs.
Criminals increasingly use non-cash methods to launder large amounts - making sectors like interior design, art, and luxury goods prime targets. Therefore, AML scrutiny is shifting to a value-based approach, encompassing all high-value payments regardless of how they are made.
Since January 2020, businesses dealing in high-value art (over €10,000) are classed as Art Market Participants and already subject to AML rules. From May 2025, all high-value transactions (not just cash) will require client sanctions screening - meaning businesses must check against UK and international sanctions lists and report matches to the Office of Financial Sanctions Implementation (OFSI).
Q: Does this only apply to cash now?
A: No - regulators now class large non-cash payments as high-risk too, meaning AML obligations can be triggered by high-value transfers, not just cash.
Q: What new compliance came into force for May 2025?
A: Sanctions screening. Any transaction over €10,000 requires client screening against sanctions lists, and reporting to OFSI if there are matches
Know Your Business (KYB) is the regulatory and due diligence process of verifying the identity, ownership structure, and legal status of a business entity. It is a core element of anti-money laundering (AML) and counter-terrorist financing (CTF) compliance for transactions involving corporate clients.
KYB helps regulated businesses confirm they are dealing with legitimate companies and understand who ultimately owns or controls them. This is critical for detecting shell companies, preventing financial crime, and avoiding regulatory penalties.
In the UK, KYB requirements are covered by the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 and typically complement Know Your Client (KYC) checks.
Q: How is KYB different from KYC?
A: KYB is for verifying business entities, while KYC is for verifying individuals. Both processes often work together when a corporate client has individual directors or beneficial owners.
Q: Is KYB required for all businesses?
A: In the UK, KYB is mandatory for regulated firms dealing with corporate clients and for high-value dealers and art market participants. It’s also considered best practice for non-regulated businesses to avoid fraud and reputational risk.
Know Your Client (KYC) is the regulatory and risk management process of confirming the identity of a client before establishing a business relationship or carrying out certain transactions. KYC ensures compliance with anti-money laundering (AML), counter-terrorist financing (CTF), and other financial regulations.
KYC is a cornerstone of financial crime prevention. It protects businesses from inadvertently facilitating criminal activity and helps maintain trust with regulators, clients and counterparties.
In the UK, KYC requirements are set out in the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 and apply to a wide range of regulated businesses, from banks and law firms to estate agents and high-value dealers.
Q: How is KYC different from CDD (Customer Due Diligence)?
A: KYC is often used as a general term for client identity checks, while CDD refers to the specific procedures and standards required under AML regulations.
Q: Is KYC always mandatory?
A: For regulated businesses in the UK, yes - before any regulated activity begins or certain thresholds are met. It is also mandatory in the context of high-value dealers and art-market participants.
Know Your Trust (KYT) is the due diligence process for identifying and verifying a trust or foundation, including its legal status, structure, and the identities of the people who control or benefit from it. KYT is a variant of Know Your Business (KYB), adapted for the specific nature of trusts and foundations.
Trusts and foundations can be used for legitimate asset protection and estate planning, but also risk misuse for money laundering, tax evasion, or concealing beneficial ownership.
In the UK, KYT procedures are required under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 and include checking the UK Trust Registration Service (TRS) or equivalent registries in other jurisdictions.
Q: How is KYT different from KYB?
A: KYB verifies a business entity and its owners; KYT verifies a trust or foundation and its controlling parties. The verification steps are similar but adapted to non-corporate legal structures.
Q: Is KYT mandatory?
A: Yes - for regulated firms and high-value dealers / art market participants dealing with trusts or foundations in the UK, KYT checks are a legal requirement. Even unregulated firms should apply them as part of risk management.
The Office of Financial Sanctions Implementation (OFSI) is part of HM Treasury and is tasked with ensuring that financial sanctions are properly understood, implemented, and enforced in the UK.
OFSI maintains the UK Consolidated List of sanctioned individuals, entities, and ships, and provides the framework for freezing assets, blocking transactions, and preventing financial dealings with designated parties.
Failure to comply with UK financial sanctions is a criminal offence, punishable by significant fines and imprisonment.
OFSI issues guidance for businesses and individuals, processes applications for licences to carry out otherwise prohibited activities, and enforces compliance — including imposing civil monetary penalties for breaches.
Q: Where can I find the UK sanctions list?
A: On the OFSI section of the UK government website - the UK Consolidated List.
Q: How quickly must I report a sanctions match to OFSI?
A: Immediately, as soon as you identify a confirmed match and freeze the relevant assets.
A Politically Exposed Person (PEP) is someone who has been entrusted with a prominent public function, such as a government minister, senior judge, ambassador, or high-ranking military officer. This definition extends to their close family members and known close associates.
The rationale is that such individuals may be more vulnerable to corruption or abuse of position, making their financial activity higher risk.
Under the UK Money Laundering Regulations 2017, regulated firms must identify PEPs and apply Enhanced Due Diligence before entering into or continuing a business relationship with them.
PEP status alone is not evidence of wrongdoing, but it does require additional scrutiny to ensure that funds are legitimate and the relationship is not being used for illicit purposes.
Q: Are all PEPs treated the same?
A: No. UK law distinguishes between domestic and foreign PEPs, with foreign PEPs typically requiring more stringent measures.
Q: Can you refuse a client purely for being a PEP?
A: There is no legal requirement to refuse PEPs, but firms may decline if the risk is unacceptable.
Record-keeping refers to the obligation to store and maintain records relating to customer identification, transactions, and compliance processes. In the UK, regulated businesses must retain these records for a set period — typically five years from the end of a business relationship or the date of a transaction — under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
Proper record-keeping enables regulators, law enforcement, and the business itself to:
Failure to keep adequate records can result in regulatory fines, reputational damage, and difficulty defending against allegations of non-compliance.
Q: Can records be stored electronically?
A: Yes - as long as they are secure, retrievable, and meet regulatory standards for integrity and accessibility.
Q: Do I need customer consent to retain AML records?
A: No. AML record-keeping is a legal requirement and overrides certain data protection provisions, though retention periods must still be observed.
Sanctions screening is the process of comparing customer, counterparty, and transaction data against official sanctions lists issued by authorities such as the UK Office of Financial Sanctions Implementation (OFSI), the United Nations (UN), the European Union (EU), and the US Office of Foreign Assets Control (OFAC).
The goal is to identify matches to sanctioned individuals, organisations, or countries so that prohibited transactions can be blocked and reported.
Engaging in business with sanctioned parties is a criminal offence in the UK, carrying heavy financial penalties and potential imprisonment.
From May 2025, UK law will require mandatory sanctions screening for high-value transactions (over €10,000), even in sectors previously outside the scope of full AML supervision. This will particularly affect high-value goods dealers, art market participants, and other luxury sector businesses.
Q: How often should sanctions screening be done?
A: At onboarding, before certain high-value transactions, and on an ongoing basis whenever sanctions lists are updated.
Q: What happens if I find a sanctions match?
A: Freeze the relevant assets immediately, stop the transaction, and report to OFSI. Do not alert the sanctioned party.
dospay is a trading name of DOS & Co. Ltd, a company registered in England and Wales with company number 08294966.
DOS & Co. Ltd. is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 833374) for the provision of payment services.
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