Criminal Finances Act 2017 Insight

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Financial services firms will soon face potential criminal liability if they or ‘associated persons’ fail to prevent the facilitation of tax evasion. The firm may be liable even if it was not involved in the act, did not condone it or was unaware of it. The new law will come into effect on the 30th of September 2017.

The Act follows the pattern of the UK Bribery Act in that it not only holds the firm responsible for acts of its employees, officers, executives and boards, but it also applies to associated parties such as brokers, agents, intermediaries and introducers. Whilst there will be a defence that the firm has ‘reasonable prevention procedures’, this is much more onerous than simply having an appro-priate policy in place. Firms will need to evidence that they have the right governance, risk assessments, monitoring and systems and controls in place to address this risk. It also applies to acts outside of the UK

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