New legislation announced to target money laundering and tax evasion

By Eleanor O'Neill, CA Today

24 October 2016

A new piece of legislation designed to crackdown on money laundering and tax evasion is being considered by parliament.

The Criminal Finances Bill was introduced to the House of Commons on 13 October as a key element of one of the most significant changes to the UK's anti-money laundering and terrorist finance regime in over a decade.

The proposed measures will reportedly improve the government’s ability to tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing.

One of the key elements of the bill is a new corporate offence of failure to prevent tax evasion. Under the provisions, a company or partnership will be found guilty of a crime if it fails to prevent an associated person, such as an employee, consultant, agent or contractor, facilitating tax evasion, though proof of reasonable prevention procedures will provide protection.

Major reform of the Suspicious Activity Report (SARs) regime is also being put forward with a power to extend the moratorium period in which submitted reports can be investigated from 31 days to 186 on application to the courts.

The National Crime Agency may also be awarded new powers to request information from regulated companies to complement a fundamental reform to the suspicious activity report regime.

In addition, changes to information sharing legislation will allow the sharing of data between regulated bodies, intended to create a more joined-up approach in combating money laundering.

Other specifics of the bill include the power to demand an Unexplained Wealth Order from certain individuals with seemingly suspect funds and new assets being made capable of seizure under the Proceeds of Crime regime.

The new legislation was designed with a focus on the national priorities in financing risk identified in October of last year, namely enabling a more robust law enforcement response, reforming the supervisory regime and increasing the UK’s international reach in financial crime prevention.

Charlotte Barbour, Director of Taxation at ICAS, noted: "The real aim of this legislation is to encourage businesses to put in place proper processes to ensure sound business practices. The aim is to drive better behaviour and to have companies accept responsibility for this."

The Criminal Finances Bill is expected to have its second reading debate in the House of Commons on Tuesday 25 October.


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