ARTICLE
14 November 2016

Time For Senior Managers To Roll Up Their Sleeves Over UK Legal Reforms To Tax Evasion Laws

O
Ogier

Contributor

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Ogier provides legal advice on BVI, Cayman, Guernsey, Irish, Jersey and Luxembourg law. Our network of locations also includes Beijing, Hong Kong, London, Shanghai, Singapore and Tokyo. Legal services for the corporate and financial sectors form the core of our business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. We also have strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and corporate recovery and property. Our corporate administration business, Ogier Global, works closely with Ogier's partner-led legal teams to incorporate and administer a wide variety of vehicles, offering clients integrated legal and corporate administration services. We have the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost effective services to all our clients.
Senior management will have to take a hands-on approach to compliance when the new UK offence of failing to prevent the facilitation of tax evasion comes into force, says Ogier's Head of Regulatory Services.
United Kingdom Wealth Management

Senior management will have to take a hands-on approach to compliance when the new UK offence of failing to prevent the facilitation of tax evasion comes into force, says Ogier's Head of Regulatory Services.

Partner Nick Williams says that the new strict liability offence, which targets companies and partnerships that do not have reasonable procedures to stop employees and other people associated with the business from assisting underlying tax evasion, will require a separate focus to existing compliance obligations, and will specifically demand that senior management take a direct role in promoting a culture of awareness and zero-tolerance in this area.

The law – currently contained in the UK's Criminal Finances Bill which was introduced to the House of Commons last month and is expected to be enacted next year - could potentially reach companies and partnerships outside of the UK, and places an onus on them to demonstrate that their culture and processes create a focused engagement on preventing the facilitation of tax evasion.

Nick said: "All firms involved in the financial services sector will have their own existing suite of compliance and regulatory obligations that they are familiar with, but it will not be enough to rely on those procedures in respect of the new law.

"This legislation specifically requires engagement from those at the top of organisations, and demands that they can demonstrate that they are integrally involved in efforts to prevent the facilitation of tax evasion.

"It will also demand specific risk assessment and due diligence processes as well as regular updates to staff training.

"From a regulatory point of view, any financial services provider which has a nexus with the UK or whose clients or customers are UK tax payers – no matter where that financial services provider is actually based - should be considering updating their procedures so that they can demonstrate an adequate approach to prevention. Whilst further guidance has been promised, existing guidance is sufficient for businesses to begin this process.  Rapid implementation will be expected as and when the legislation is enacted, so early preparation is potentially very important."

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