Criminal Finances Bill 2016: UK Government looks to impose financial crimes reform

The Criminal Finances Bill 2016 (the Bill) was presented to Parliament on Thursday 13th October. In a press release on the same day, the Home Office stated that the new legislation is designed to “tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing“.

The Bill is divided into four parts:

  • Part 1 adds new powers for enforcement agencies under the Proceeds of Crime Act 2002 (POCA);
  • Part 2 makes changes to existing anti-terrorism legislation;
  • Part 3 makes provision for two new corporate offences of relating to tax evasion;
  • Part 4 includes minor and consequential amendments to POCA.

This article examines 3 proposals within the Bill | Kangs Fraud Team

  1. Unexplained Wealth Orders | Asset Recovery
  • Unexplained Wealth Orders (UWO) will mean an individual or company will have to explain the origin of assets that appear to be disproportionate to known income if they are suspected of involvement in, or association with serious criminality.
  • A UWO will also be applied to foreign politicians or officials, their family members or close associates.
  • The National Crime Agency, Crown Prosecution Service, Financial Conduct Authority (FCA), Serious Fraud Office (SFO) and HM Revenue and Customs (HMRC) will all be able to apply for the issue of a UWO.
  • If any individual or company served with a UWO is unable to satisfactorily respond to its contents law enforcement agencies will have the power to seek recovery of any affected property through existing civil recovery powers.
  1. Amendments to POCA | Strengthening of existing powers:
  • HMRC and the FCA will have powers to seek the civil recovery of property before the High Court;
  • The Bill will provide authorities with the ability to investigate any wealth derived from criminality and the amount ordered to be paid by any Confiscation Order will be subject to be increased to reflect the full extent of the criminal benefit;
  • Operational powers of SFO officers will be brought into line with other law enforcement agencies working on the same investigations.
  1. Corporate failure to prevent tax evasion | increased responsibility for business owners:
  • This measure introduces two new criminal offences designed to prevent corporate facilitation of tax evasion:

The domestic fraud offence – which criminalises corporations, based anywhere is the world, which fail to put in place reasonable procedures to prevent their representatives from criminally facilitating tax evasion.

The overseas fraud offence – which criminalises corporations carrying out a business in the UK, which fail to put in place reasonable procedures to prevent their representatives facilitating tax evasion in another jurisdiction.

  • These offences are designed to impose stringent obligations on companies to actively combat financial fraud.

How can we help? | Kangs Fraud Solicitors | Regulatory Team

We have an experienced team of lawyers who are able to provide clear advice in relation to matters of asset recovery, proceedings brought pursuant to the Proceeds of Crime Act, Tax investigations brought on behalf of HMRC and allegations of fraud or money laundering.

If you have been contacted by the SFO, HMRC, City of London Police or the FCA we will be able to assist you in responding to applications or attending interviews under caution.

Kangs Solicitors have a proven track record in defending allegations of fraud and money laundering. 

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Who to contact | Our Team

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258 171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396

Tim Thompson
tthompson@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396 | 07989 521210