A new corporate crime of failing to prevent the criminal facilitation of tax evasion is among the government’s proposals to tackle money laundering and corruption
The UK government's long-awaited proposals to tackle money laundering and corruption and counter terrorist financing were revealed in the Criminal Finances Bill, published on 13 October 2016. As well as changes to the regime for recovery of the proceeds of crime, the Bill introduces a new corporate criminal offence of failing to prevent tax evasion. The Bill may be passed into law as early as next Spring.
The Bill contains three main areas of reform:
- The creation of new corporate offences of failure to prevent facilitation of tax evasion. In summary, the proposed new offence will be committed where there is:
- criminal tax evasion by a taxpayer (either a legal or natural person) under the existing criminal law;
- criminal facilitation of that offence by a person acting on behalf of a "relevant body", and
- the organisation in question had no available reasonable prevention procedures in place to prevent the conduct.
We have previously published a note giving more detail on these proposed offences, here.
- Recovery of the proceeds of crime and enforcement powers, including the regime around dealing with the proceeds of crime, money laundering, civil recovery and enforcement. Law enforcement agencies will be given new powers to request information in relation to a money laundering investigation, extending the availability of existing disclosure orders used in confiscation investigations and fraud investigations. Another new power will enable the seizure of funds in bank accounts and items of value, where these are reasonably suspected to be the proceeds of crime. Changes to the Proceeds of Crime Act 2002 (POCA) will permit the sharing of information between entities in the regulated sector where they have notified the National Crime Agency (NCA) that they suspect activity is related to money laundering, a so-called "super SAR".
New Unexplained Wealth Orders (UWO) will be available to require a person suspected of involvement in or association with serious criminality to explain the origin of assets that appear to be disproportionate to their known income. This power would extend to foreign politicians or officials or those associated to them (Politically Exposed Persons), reflecting the concern that those involved in corruption overseas launder the proceeds of their crimes in the UK, and the difficulties faced by law enforcement agencies obtaining sufficient evidence when all relevant information may be outside of the jurisdiction.
- The extension of money laundering and asset recovery powers to investigations in relation to terrorist property and terrorist financing under the Terrorism Act 2000 (TACT) and the Anti-Terrorism, Crime and Security Act 2001, including the powers to enhance the SARs regime, information sharing, seizure and forfeiture powers and disclosure orders.
We will be publishing a more detailed note on the proposals contained in the Bill shortly.