The Criminal Finances Act 2017 is expected to come into force this autumn. The Act creates new corporate offences of 'failure to prevent the facilitation of tax evasion' in the UK or overseas, punishable by unlimited fines. The Act has broad geographical application and non-UK companies may also be the subject of these new offences.
A company commits an offence if a person associated with it facilitates tax evasion in the UK or overseas. This applies when a person is providing a service for or on behalf of the company. The new offences are of strict liability. One defence available to the company is that it had in place preventative procedures that were reasonable in the circumstances. Guidance is due to be published by the Chancellor to assist companies in identifying what those procedures might be.
The Act is not exclusive to companies providing tax advice and will have significant impact on financial institutions. Insurers may want to understand what systems and controls have been adopted by any financial institutions as part of the underwriting process.