Cordium launches solution for Criminal Finances Act

Cordium, which provides governance, risk and compliance services, has launched a solution for businesses adapting to the requirements of the UK’s Criminal Finances Act, taking effect by September 2017.

The legislation is intended to prevent tax evasion in the UK and elsewhere. All UK businesses in the scope of the legislation must take steps to prevent criminal activity. The Act has been brought about by HM Revenue and Customs, the branch of the UK government responsible for collecting taxes.

The areas addressed by the legislation include:

  • Risk assessment – Determine areas of vulnerability and necessary courses of action
  • Proportionate procedures – Implement appropriate risk management policies and systems
  • Top-level commitment – Ensure a culture of compliance from the senior level down
  • Due diligence – Maintain a thorough knowledge of all parties acting on firm’s behalf
  • Communication and training – Ensure policies are understood throughout the organisation
  • Monitoring and review – Regularly assess effectiveness and make improvements, as needed

Matthew Crisp, managing director at Cordium, said: “Fund managers, wealth managers, and other financial service businesses are subject to a higher risk of facilitating tax evasion and we expect such businesses to be held to a higher standard when it comes to the changes required. The speed with which the new rules have materialized means that firms need to act immediately to ensure compliance. Our new solution will help clients adapt to the measures as quickly as possible in a manner that is practical from a business perspective.”

According to the UK’s Home Office, the Act, which passed Royal Assent in April 2017, will “give law enforcement agencies and partners, further capabilities and powers to recover the proceeds of crime, tackle money laundering, tax evasion and corruption, and combat the financing of terrorism.”

Key attributes of the Act listed by the Home Office include:

  • creates unexplained wealth orders which can require those suspected of serious crime or corruption to explain the sources of their wealth
  • creates new criminal offences for corporations who fail to prevent their staff from facilitating tax evasion
  • enables the seizure and forfeiture of proceeds of crime and terrorist money stored in bank accounts and certain personal or moveable items
  • provides legal protections for the sharing of information between regulated companies and extends the time period granted to law enforcement agencies to investigate suspicious transactions
  • extends disclosure orders to cover money laundering and terrorist finance investigations
  • extends the existing civil recovery regime in the Proceeds of Crime Act to allow for the recovery of the proceeds of gross human rights abuses or violations overseas

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 16 years he has been based in London writing about funds and investments . From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope.

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