The UK Criminal Finances Act seeks to stamp out corporate tax evasion
Thanks to legislation that is due to come into force in the United Kingdom this September, corporations face the risk of an unlimited fine and a criminal conviction if any employee or “associated person” working on the company’s behalf facilitates tax evasion.
Under the terms of the Criminal Finances Bill that received Royal Assent at the end of April, lawyers warn that “facilitation” is “widely defined,” and that the compliance challenge is not limited to the UK Global institutions with a UK presence could be subject to UK criminal proceedings if an employee anywhere in the world—including agents or sub-contractors acting on the organisation’s behalf—is found guilty of facilitating tax evasion.
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According to Peter Binning at law firm Corker Binning, effective monitoring does not need to be “exhaustive” and can be easily demonstrated by providing up to date money laundering, bribery and corruption policy/training, and carrying out departmental risk assessments and enforcing additional accountability for those areas that are higher risk.
He also says that organisations should ensure that company policy is in accordance with the government’s guidance (once published) concerning the prevention procedures, and that companies should conduct extensive vetting on all associated persons as defined in section 44(4) of the legislation. “Companies should also maintain detailed records of these measures to show that active steps to prevent corporate offending are being taken,” he says.