Tax evasion facilitation prevention compliance checklist (an extract)

Transcription

1 prevention compliance checklist (an extract)

2 This Checklist pulls together requirements in the Criminal Finances Act 2017 (CFA 2017) and associated guidance relating to tax evasion facilitation prevention procedures. It also contains best practice recommended actions. The Checklist signposts relevant Precedents you can use or adapt to comply with these requirements and recommendations. There is a section for you to mark whether you have completed the requirement and also to insert comments or note action points. This Checklist adopts the six guiding principles set out in Please note this is an extract of our. Risk assessment REQUIREMENT COMPULSORY OR RECOMMENDED DONE? COMMENT/ACTION Determine: who will conduct the risk assessment who will have oversight of the risk assessment process, and how to ensure the risk assessment is subject to proper internal interrogation The obligation to conduct a risk assessment falls on the organisation itself rather than any specified individual. HMRC guidance set out a clear expectation of: oversight of the risk assessment by senior management appropriate allocation of resources to the detection and monitoring of risk, reflecting the size and nature of the organisation This is provided for in Precedent: risk assessment. Identify internal and external sources of information that will enable risk to be assessed and reviewed as well as gaps in the information and how these may be filled. This is provided for in Precedent: risk assessment. 1

3 Assess the risks presented by: the profile and demographic of your customer/client base the geographical areas in which you operate the sectors in which you operate the services and/or products you offer the type of transactions you are involved in existing and future business partnerships and opportunities the way in which your business operates As above. Accurately and appropriately document the risk assessment if this is done as part of a wider business crime risk assessment, it should be clear where and how tax evasion facilitation risks have been considered. See Precedent: risk assessment. Implement systems and controls to: ensure your firmwide risk assessment remains up to date identify emerging risks so you can assess and, where appropriate, incorporate these into your firm-wide risk assessment in a timely manner See Precedents: Crime prevention quarterly monitoring record and prevention annual review. 2

4 Proportionate risk-based prevention procedures REQUIREMENT COMPULSORY OR RECOMMENDED DONE? COMMENT/ACTION If you consider it is not reasonable in all the circumstances for you to have any prevention procedures in place: keep a record of your reasoning (by reference to your firmwide risk assessment) ensure you can articulate the outcome of the risk assessment and your decision, should they be challenged at a later stage Otherwise proceed with the remainder of this Checklist. Compulsory The requirement to positively establish that you do not require prevention procedures is compulsory if you wish to rely on the second limb of the statutory defence to the corporate offence of failure to prevent tax evasion facilitation, ie that it was not reasonable in all the circumstances for you to have prevention procedures in place. CFA 2017, ss 45(2) and 46(3) HMRC guidance suggests that it may be unreasonable to expect any prevention procedures where: you have fully assessed all the risks the risks are considered to be extremely low, and the costs of implementing prevention procedures are disproportionate or cost- prohibitive in relation to the negligible risks faced However, it will rarely be reasonable to have not even conducted a risk assessment (see Precedent: Facilitation of tax evasion risk assessment). Where, following a comprehensive risk assessment, you have made an active decision not to implement any procedures, you should keep the risks under review. Identify and implement such prevention procedures as are reasonable in all the circumstances to expect. Compulsory The requirement to identify and implement reasonable prevention procedures is compulsory if you wish to rely on the first limb of the statutory defence to the corporate offence of failure to prevent tax evasion facilitation, ie that you had in place such prevention procedures as it was reasonable in all the circumstances to expect. CFA 2017, ss 45(2) and 46(3) This Checklist is an overarching guide to the sort of prevention procedures you may wish to consider. 3

5 See also Practice Note: Failure to prevent facilitation of tax evasion proportionate risk-based prevention procedures and Precedents: Register of tax evasion facilitation prevention policies, plans and procedures Create an overview of the strategy and timeframe to implement prevention procedures. This Checklist can be used to record your strategy, timeframe and progress. See also Practice Note: Failure to prevent facilitation of tax evasion proportionate risk-based prevention procedures and Precedents: Register of tax evasion facilitation prevention policies, plans and procedures code of ethics Ensure there is a clear pathway for reporting wrongdoing by employees and agents. The following Precedents prompt you to insert details of the relevant pathway for your organisation: code of ethics 4

6 Ensure there is protection for whistleblowers. See Precedent: Policy and procedure whistleblowing (short form) Introduce contractual terms and conditions for employees and agents requiring them not to engage in facilitating tax evasion and to report any concerns immediately. Precedent: Anti-tax evasion facilitation clause pro-customer Appropriate wording has also been inserted into Precedent: Tax evasion facilitation. Make provision for disciplinary and enforcement action taken against those persons breaching your policies. Included in Precedents: Message from CEO on introduction of tax evasion facilitation Consider how you will communicate your policies to all associated persons. See below: Due diligence. Policies around reporting criminal actions by employees and agents. Included in Precedents: Message from CEO on introduction of tax evasion facilitation 5

7 Disclosure of client information in line with existing legal requirements, for example reporting under the Common Reporting Standard and the Proceeds of Crime Act This is something you should consider notifying clients of in your terms of engagement/business. Organisations caught by the Money Laundering Regulations 2017 will probably already have wording in place that they can simply modify. For more information on LexisPSL Risk & Compliance click here. RELX (UK) Limited, trading as LexisNexis. Registered office 1-3 Strand London WC2N 5JR. Registered in England number VAT Registered No. GB LexisNexis and the Knowledge Burst logo are registered trademarks of RELX Inc LexisNexis SA The information in this document is current as of September 2017 and is subject to change without notice.