CCO, AML and Enablers Policy Reviews

CCO, AML and Enablers Policy Reviews

As HMRC tightens the grip on non-compliance globally, holding them to account for facilitating money laundering and tax evasion, STS (Europe) Limited can ensure that business policies are up to date and in line with current regulations.

Corporate Criminal Offence (CCO)

The Government states that relevant bodies are criminally liable where they fail to prevent their clients or assist them in evading tax. As a result, the CCO legislation came into effect on 30 September 2017. The legislation is designed to prevent the evasion of UK tax and foreign tax and can be applied anywhere in the world.

Previously, attributing criminal liability to a relevant body required prosecutors to show that the senior members of the relevant body were involved in and aware of the illegal activity, typically those at the Board of Directors level. Making it hard for large multinational organisations to be held to account and creating an unlevel playing field with small businesses.

The CCO legislation now deems offences to be committed where a relevant body fails to prevent an associated person criminally facilitating the evasion of a tax. This will be the case whether the tax evaded is owed in the UK or in a foreign country.

Any business, be it a UK corporate or a foreign corporate doing business in the UK, will be within the scope of both offences. The corporate or partnership involved will fall foul of criminal law where the fail to prevent the facilitation of tax evasion. One of the key defences against any punishment is having reasonable prevention procedures in place.

Anti-Money Laundering (AML)

Anti-Money Laundering is a set of laws, regulations and procedures that must be followed. The aim the AML is to prevent criminals from disguising illegally obtained funds as legitimate income.

For businesses providing defined services, the AML Regulations require anti-money laundering systems and controls that meet the requirements of the UK anti-money laundering regime. The AML Regulations impose a duty to ensure that relevant employees are kept aware of these systems and controls, and are trained to apply them properly. Businesses are explicitly required to:

  • Monitor and manage their own compliance with the AML regulations; and
  • Make sure they are always familiar with the requirements of the AML Regulations to ensure continuing compliance.

Where a business fails to comply with the regulations both civil penalties and criminal sanctions can be imposed, on the business and individuals involved.

It is imperative that any company that processes funds of any nature ensure their policies are up to date, and that they have the correct procedures in place, so that all staff members are aware of and can identify, money laundering.

Enablers

An enabler is any person who, in the course of a business, enables abusive tax arrangements that are defeated. Whether they are the designer, manager, promoter or an individual/entity who controls the finances of the arrangement, a person just needs to meet one of the key 5 enabler descriptions to be in scope for a penalty under the enabler’s legislation.

A key requirement of the descriptions for enabler activities, other than an enabling participation, is that the activity must be performed in the course of a business carried on by that person. This means that an employee of a business is excluded from being an enabler in relation to activities that have been performed. Instead, as they have been performed as part of an employment, it is the business that will face the consequences of the Enablers legislation.

It is now essential that all entities have the correct policies and procedures in place to provide a defence against the Enablers legislation.

Whether you have an existing policy in place or you’re are starting from scratch, our experts can review and guide you through designing and implementing procedures to ensure you are compliant with the CCO and AML legislation.

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