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Summary of the topic

On 30 September 2017, the UK Criminal Finances Act 2017 (the CFA) came into force, along with its newly-focused corporate criminal offences of failure to prevent the facilitation of tax evasion. Given the extra-territorial ramifications of the CFA, Channel Islands businesses, especially those in the financial services and accountancy sectors, including branch offices, promoters and managers of investment products, wealth managers, fiduciaries and trustees, will in particular need to be astute to its challenges and effects.

In particular, these firms need to take what HM Revenue & Customs (HMRC) has called a “risk-based and proportionate” approach to implementation of preventative procedures

Speaker James Mews, Counsel, Pinel Advocates

Target audience

Directors including NEDS

Compliance including MLCOs, MLROs

Client administrators

Current arrangements Pomme d'or

20th March

registration at 8,

start at 8:15

finish at 9:30o

1.25 hrs CPD
• Event Briefing
• On 30 September 2017, the UK Criminal Finances Act 2017 (the CFA) came into force, along with its newly-focused corporate criminal offences of failure to prevent the facilitation of tax evasion. Given the extra-territorial ramifications of the CFA, Channel Islands businesses, especially those in the financial services and accountancy sectors, including branch offices, promoters and managers of investment products, wealth managers, fiduciaries and trustees, will in particular need to be astute to its challenges and effects. In particular, these firms need to take what HM Revenue & Customs (HMRC) has called a “risk-based and proportionate” approach to implementation of preventative procedures

• Businesses anywhere in the world will commit a crime under the CFA if they fail to prevent the facilitation of UK tax evasion offences. Hence, where there is UK tax evasion facilitation, it is irrelevant whether the business is UK-based or established under the law(s) of another country, like Guernsey or Jersey.

• Furthermore, it is irrelevant whether the associated person who performs the criminal act of facilitation is in the UK or overseas. In any such cases, the new offence will have been committed and can be tried before the UK courts.• In the UK for failure to prevent the facilitation of Guernsey or Jersey (or any other foreign) tax evasion in circumstances where there is a sufficient nexus to the UK. This nexus can exist either because o the business is incorporated under UK law, or o because it carries on a business or other undertaking from a permanent establishment within the UK.

• Furthermore, there is also sufficient nexus where the associated person was in the UK at the time of committing the criminal act that facilitated the evasion of the overseas tax.

• However, the CFA requires there to be “dual criminality” - this means that:o First, the overseas jurisdiction must have an equivalent tax evasion offence at the taxpayer level to that in the UK; and o second, the actions carried out would have to constitute a crime if they took place in the UK. Therefore, an offence cannot be committed where the acts of the associated person would not be criminal if committed in the UK, regardless of what the foreign law would be. In circumstances where, for example, our domestic fiscal evasion laws are very similar to the UK, we expect that there will be very few (if any) loopholes upon which Channel Islands businesses can rely