Effective from 30 September 2017 after gaining Royal ascent in April earlier that year
Radical overhaul of the Proceeds of Crime Act 2002 (POCA) anti-money laundering and confiscation regime
How does this Affect Businesses and Individuals?
Companies and partnerships – criminally liable for failure to prevent tax evasion by either a member of their staff or an external agent
Even where the business was not involved in the act or was unaware of it
Includes solicitor, accountants and other professionals providing tax advice
A prosecution could lead to both a conviction and unlimited penalties
Although tax evasion is already an offence, in the past it has was not possible to ascribe criminal liability to the firm where it occurred
Are there any Exclusions?
A business may avoid criminal liability where it can show that it had implemented reasonable prevention procedures
or where it can show that in the circumstances it would have been unreasonable or unrealistic to have expected it to have had procedures in place
What should I do as a Business Owner?
Firms should ensure they have adequate internal control and procedures in place to mitigate the risks
These should be reviewed periodically and suitable levels of monitoring and staff training should be implemented
Risk assessments
Risk assessments should be carried out for the following:
products
services
client data
and internal systems that could be used to facilitate tax evasion
Procedures and Internal Controls
Following a risk assessment, the firm may decide that an upgrade of procedures and internal controls is required to deal with the risk identified. These could include:
Making clear to employees that the firm is committed to preventing the facilitation of tax evasion
Including clauses in contracts with employees and external contractors requiring them not to engage in facilitating tax evasion, and to report their concerns straightaway
Providing staff training on recognising and preventing financial crime
Providing a safe whistle-blowing procedure
Monitoring and enforcing prevention procedures
Regular reviews of prevention procedures and changing them where required
Other Important Outcomes of the Act
In addition to the above, the Act allows for Unexplained Wealth Orders to be served on individuals suspected of a serious crime to explain the sources of their wealth
Any proceeds of crime can be seized by the authorities
Further powers for authorities to investigate suspected money laundering or terrorist financing
New orders to require someone to disclose information they may have on money laundering
