Section 11 of the Criminal Finances Act 2017 amends the Proceeds of Crime Act (POCA) and affects the regulated sector. The new data sharing regime enables regulated persons to request and share information with their regulated peers, free in most respects from contravening the EU’s General Data Protection Regulations (GDPR). Any disclosure “made in good faith” that does not breach any duties of confidence or “any other restriction on the disclosure of information”.
The purpose is to encourage the sharing of information from different entities in the regulated sector and better enable the collation of multiple reports of potential money laundering into a single Suspicious Activity Report (SAR).
Zamira Hajiyeva spent an average of £4,000 a day in Harrods over 10 years
A woman who spent nearly £16m over a decade in Harrods and once spent £150,000 in a single day became the first target of the recently-introduced Unexplained Wealth Order (UWO). Under this provision of the Criminal Finances Act, which came into force on 31 January 2018, the Azerbaijan international, Zamira Hajiyeva, must give proof of how she and her husband can afford their luxury lifestyle. This includes a £15m home in Central London, an average spend of £4,000 a day at Harrods over ten years and a £10m golf course near Ascot. Should she not have an adequate explanation, she would be the first to be brought to account for unexplained wealth.
When your organisation is using third parties, it is essential to complete your own due diligence equal to the risk faced from the said relationship. With businesses and partnerships around the world growing, it is essential to make sure all your relationships and third parties are legal and legitimate. VinciWorks’ guide to risk based third party due diligence will give you a clearer understanding of how to conduct a detailed and genuine risk assessment.
Impact of the Sanctions and Anti-Money Laundering 2018 Act on the Crown Dependencies and British Overseas Territories
Following an amendment to the recently enacted Sanctions and Anti-Money Laundering Act which will introduce public ownership registers in British Overseas Territories, the amendments sponsors Andrew Mitchell and Dame Margaret Hodge will visit the Isle of Man to persuade the government to create a publicly accessible register of beneficial ownership.
Currently, the Manx Government’s central register is only accessible to law enforcement and tax officials, but the UK government is keen for the Crown Dependencies to adopt the approach being set out in the EU’s Fifth Anti-Money Laundering Directive.
Amendment to the Sanctions and Anti-Money Laundering Bill
On 1 May, Foreign Office minister Alan Duncan announced that the government would not oppose a Labour amendment to the Sanctions and Anti-Money Laundering Bill currently going through parliament that will introduce public ownership registers in Britain’s overseas territories.
The 14 overseas territories, including the British Virgin Islands and the Cayman Islands, will be forced to introduce the public registers by 2020 or have them imposed by the UK government. The amendment will not apply to the Crown Dependencies of Guernsey, Jersey and the Isle of Man as Parliament cannot legislate for them, but Conservative MP Andrew Mitchell who introduced the amendment along with Labour MP Margaret Hodge hoped the crown dependencies would also embrace the registers.
Are your staff aware of the reasonable procedures under the Criminal Finances Act?
The Criminal Finances Act, which came into force in September 2017, introduced the requirement for businesses to have reasonable procedures to prevent the facilitation of tax evasion. If you do not feel that your organisation complies with the Criminal Finances Act, it is important to start a thorough risk assessment of all areas of your business operations. Organisations must also draw up an implementation plan that includes training on the Criminal Finances Act.
Click on a tax haven to learn more about their risks
The recent huge leak of financial documents revealing how the ultra-rich are secretly investing large amounts of cash in tax havens is the biggest such leak since the Panama Papers last year.
Hundreds of thousands of workers in both regulated and nonregulated sector at risk of facilitating tax evasion
With the Criminal Finances Act now in full force, VinciWorks has been helping businesses prepare with their new course, Tax Evasion: Failure to Prevent. The new law doesn’t just affect the regulated sector; any business that doesn’t have reasonable procedures in place to prevent facilitation of tax evasion could find themselves prosecuted.
So just how prepared are we for the Criminal Finances Act? VinciWorks surveyed over 250 UK companies with a combined workforce of around 430,000 people to find out just how much tax evasion risk companies are exposing themselves to, and if they have started to take action to mitigate those risks.
What you need to do now to prevent facilitation of tax evasion
From today, 30th September 2017, the new Criminal Finances Act is in full legal force. The race is now on for all companies to ensure they have duly considered what reasonable procedures they have in place to prevent corporate facilitation of tax evasion.
If you haven’t done anything yet, don’t worry. It’s not too late, but it’s vital to start working now to ensure your business has a legal defence should the worst happen. Just like the age old saying that your first payment of every month should be to the insurance company, the first task on Monday’s agenda should be to figure out what your company needs to do to prevent tax evasion.
Read more: VinciWorks survey reveals staff at 1 in 4 companies unaware of financial crime policies
On 30th September 2017, the Criminal Finances Act comes into force, as does the requirement for businesses to have reasonable procedures to prevent the facilitation of tax evasion. The law is broad and the net is wide; a business can be prosecuted if a contractor puts a client in touch with a dodgy accountant or the entire modus operandi of the business is to stash away taxable cash.
VinciWorks conducted a survey of 250 UK businesses to find out just how much tax evasion risk companies are exposing themselves to. A quarter of companies still do not have any policies in place to prevent financial crime and one in ten companies in the legal and financial services sector haven’t put in place a whistleblowing policy.