From March 1, HM Customs & Excise aims to make it more difficult for criminals to launder money.
Under the proposals set out in a European Directive, businesses accepting large amounts of cash for goods or services could be in for increased administrative burdens.
The regime affects High Value Dealers (HVD), defined as any business that has a policy of accepting in cash E15,000 (£11,000) or more for goods for any single transaction.
These companies must register with HM Customs & Excise. It is designed to help ensure businesses comply with their responsibilities under anti- money laundering laws.
Customs are responsible for the supervision of money laundering controls at HVDs and have been given the power to inspect premises and records of these businesses to ensure they understand their responsibilities and are complying with the law.
High Value Dealers must register under the anti-money laundering regime by April 1, 2004. But new policies and procedures must be in place by March, under the acronym CATCH:
Money-laundering rule 'will bring extra cost'
Before the legislation was confirmed, Fleet Auction Group's chief executive officer, Andrew Walker, warned there would be a number of costs associated with compliance procedures.
He said: 'Although the annual fee proposed is minimal, the additional administrative workload will have to be paid for from somewhere. In the remarketing business, it means it is either absorbed by the auction company or is reflected in increased commissions or buyers' premiums.'
Walker said the Fleet Auction Group adopted a 'no-cash policy' from its first days of trading.
Adrian Rushmore, editor of Glass's Guide, said: 'While some auction houses will not accept any payment in cash, insisting on account transactions only, others have set the limit they will accept at £9,000 in cash.' For details on the new legislation, log on to www.hmce.gov.uk/ forms/graphics/mlr6.pdf