The Criminal Finances Act 2017 received Royal Assent on 27 April 2017. It is a further step in the government’s attempt at combatting money laundering and terrorist financing. It will have wide-reaching effect for businesses in all sectors.
The Act creates new criminal offences relating to the failure to prevent the facilitation of UK and foreign tax evasion. This will impact especially on those in the professional and financial services arena.
The Act also extends the powers of law enforcement agencies to ask the courts to lock down the movement of assets and progress of transactions where there is suspicion of money laundering and to apply to court for an unexplained wealth order and an interim freezing order if required in relation to certain individuals who own specified property above a threshold of £50,000. An unexplained wealth order will require an individual to explain the nature and extent of his interest in that property and how he obtained it.
The new offences of failing to prevent the facilitation of UK and non-UK tax evasion (expected to come into force from September 2017), apply to businesses where tax evasion has been facilitated by a person who performs services for or on their behalf including agents, subcontractors as well as employees.
There is a statutory defence where, at the time of the offence, the relevant body had reasonable prevention procedures in place.
The government has published draft guidance on prevention procedures.
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