Seychelles to chair AML meeting in August 2018

January 19th, 2018

Seychelles is gearing up to hold this year’s Eastern and Southern Africa Anti-Money Laundering Group meeting in August while also preparing to take up the presidency of the group, the jurisdiction’s finance minister said.

To prepare for the high-level meeting, Seychelles’ Ministry of Finance is holding frequent meetings with all involved parties to ensure the event goes smoothly from start to finish.

The Seychelles’ Minister for Finance, Trade and Economic Planning, Peter Larose, said: “It is important that we plan ahead. I had to call on a number of parties to be able to assist as this is about Seychelles. We need to showcase Seychelles’ style of management, governance system and show the world that we are a capable, responsible and accountable government”. He said that the guests will have the opportunity to witness the competitive edge of Seychelles as part of the global village. Minister also noted that discussions in this year’s meeting will focus on our compliance with international best practices including preventing money-laundering, tax evasion and combatting the financing of terrorism. “It is part and parcel of our commitment to share information within the group and Africa, and with the rest of the world,” said Larose.

The aim of the group is to combat anti-money laundering by implementing recommendations of the Financial Action Task Force on Money Laundering (FATF). The organisation sets standards and promotes effective application of AML legal and regulatory measures.

5 steps of AML compliance in 2017

March 3rd, 2017

Sven Stumbauer, Managing Director of AlixPartners, published an article on Five Steps for Anti-money Laundering Compliance in 2017.

According to the article, banks and other financial institutions entered 2017 facing an increasingly daunting framework of anti-money-laundering (AML) laws and regulations.

Having a comprehensive compliance programme in place is currently becoming more and more crucial. So, the following five steps financial institutions can take in 2017 have been outlined:

1. KEEP ABREAST OF CHANGES AND NAVIGATE THEM DILIGENTLY

2. KNOW YOUR CUSTOMER

3. ESTABLISH A CULTURE OF RESPONSIBILITY — FROM THE TOP DOWN

4. CONDUCT A THOROUGH RISK ASSESSMENT AND AN ACCURATE RISK QUANTIFICATION

5. IMPLEMENT A SOPHISTICATED INFORMATION TECHNOLOGY SYSTEM

It has been also mentioned that recent AML enforcement actions pinpoint the danger of failing to recognize potential risk and respond appropriately. While the evolving regulatory landscape poses significant challenges to financial institutions, opportunities might also be present. By performing comprehensive risk assessments and establishing a culture of compliance throughout the organization, a financial institution can position itself to better recognize, identify, and avoid potential risk exposure. So, by full usage of technology solutions, it can develop a better understanding of its underlying customer base and ensure it complies with AML regulations at a lower cost.

Switzerland consults on implementing AEOI Agreements

December 29th, 2016

The Swiss Federal Department of Finance (FDF) has launched a consultation aimed to introduce the automatic exchange of information (AEOI) related to tax issues with a list other countries.

The consultation will run until March 15, 2017.

The list includes the following jurisdictions:
Andorra,
Argentina,
Barbados,
Bermuda,
Brazil,
the British Virgin Islands,
the Cayman Islands,
Chile,
the Faroe Islands,
Greenland,
India,
Israel,
Mauritius,
Mexico,
Monaco,
New Zealand,
San Marino,
the Seychelles,
South Africa, Turks and Caicos,
Uruguay.

The AEOI with the above-mentioned countries is to enter into force on January 1, 2018, with the first exchanges to take place in 2019.

The FDF said that the introduction of the AEOI with these countries confirms Switzerland’s international commitment to implementing the AEOI standard as well as strengthens the competitiveness, credibility, and integrity of Switzerland’s financial center. The implementation of the AEOI will be based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information.

In 2017, Switzerland will introduce the AEOI with EU member states, Australia, Iceland, Norway, Japan, Canada, South Korea, and the British crown dependencies of Jersey, Guernsey, and the Isle of Man. To enter into force, the agreements require parliamentary approval of these countries.

US Offshore Disclosure Revenue above USD 10 billion

October 26th, 2016

With 55,800 taxpayers participating in the US Offshore Voluntary Disclosure Program (OVDP) since 2009, the Internal Revenue Service (IRS) announced that it has collected more than USD 9.9 billion in taxes, interest, and penalties from the initiative to date.

The IRS added that another 48,000 taxpayers have used the streamlined filing compliance procedures to correct prior non-willful omissions and meet their federal tax obligations, paying approximately USD 450 million in taxes, interest, and penalties.

Both the Offshore Voluntary Disclosure Program and the streamlined procedures allow taxpayers with undisclosed income from foreign financial accounts and assets to correct and regularize their affairs while mitigating penalties.

IRS Commissioner John Koskinen said: “The IRS has passed several major milestones in our offshore efforts, collecting a combined USD 10 billion with 100,000 taxpayers coming back into compliance. He noted that, when receiving more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. So, the IRS urges those people with international tax issues to come forward to meet their tax obligations.

Besides the OVDP and the streamlined procedures, the IRS noted that, under the Foreign Account Tax Compliance Act and the network of inter-governmental agreements between the US and partner jurisdictions, automatic third-party account reporting has entered its 2nd year.

UN expert calls on new boss to fight Tax Havens

October 20th, 2016

The new United Nations Secretary-General, António Guterres, is being asked by one of the body’s human rights experts to call a world conference on tax avoidance and evasion, with a view to abolish all tax havens.

The UN’s independent expert on the promotion of a democratic and equitable international order, Alfred de Zayas, said that Guterres’ appointment as the new UN leader offered “a unique opportunity to advance the fight against tax evasion and illicit financial flows” when the world’s attention is on these crucial problems.

“Trillions of dollars necessary for combatting extreme poverty and addressing climate change are being kept offshore, thus escaping just taxation and effectively stealing hundreds of billions of dollars each year from the public treasuries,” he stated.

He also noted: “Widespread tax avoidance, tax evasion, tax fraud and profit-shifting, facilitated by bank secrecy and a web of shell companies registered in tax havens, are now routinely documented, but their true human cost is only revealed progressively”, following the publication of his report to the General Assembly on these matters.

According to him, a growing number of human rights experts were pointing to tax abuse as a human rights issue.

“Corruption, bribery, tax fraud and tax evasion have such grave effects on human dignity, human rights and human welfare that they shock the conscience of mankind. They should be prosecuted nationally and internationally,” de Zayas said.

UK bill to open details on multinational Tax Evasion

September 9th, 2016

A legislative amendment in the United Kingdom this week will give the British government the power to publish details of tax payments made by UK-based multinational corporations on a country by country basis, as tax authorities try to clamp down on the abuse of tax laws and aggressive tax avoidance.

The change in the law followed cross-party calls for companies to publish the details of where they do their business and the tax they pay in each place, which came in response to the controversy surrounding a deal between the government of the UK and Google to repay GBP 130 million in back taxes earlier this year.

In August, the European Commission ruled that Ireland should recover up to EUR 13 billion from Apple in back taxes.

Director of the Financial Transparency Coalition described it as a welcome step but said it was important for the government to actually use the power it now has by releasing country by country reports of UK multinationals to the public as quickly as possible. He said: “It’s time to break out of perpetual scandal mode and make some changes to business as usual. A financial system that relies on plausible deniability and shifting responsibility is inherently shaky, and it’s simply not sustainable.”

EU signs agreement with IOTA to fight Tax Evasion

July 29th, 2016

An Agreement for Cooperation has been signed by the Intra-European Organisation of Tax Administrations (IOTA) with the European Commission to allow them to work more effectively towards the common goals of the two bodies – particularly, cracking down on tax evasion.

According to an announcement made by IOTA on July 26, the main areas of collaboration under the agreement include cooperating in the fight against tax fraud, information exchange, providing mutual assistance, supporting tax authorities to improve taxpayer compliance rates, and supporting capacity building.

The agreement between IOTA and the Taxation and Customs Union Directorate General (DG TAXUD) of the European Commission was signed during IOTA’s General Assembly on July 7 in Bucharest by IOTA’s President, Octavian Deaconu, and Caroline Edery, Head of Unit, Tax Administration and Fight Against Tax Fraud, DG TAXUD.

IOTA is a non-profit intergovernmental organization based in Budapest that is aimed at promoting best practices in tax administration and more effective cooperation between its 46 member tax authorities.

Singapore Authority sets up AML department

June 13th, 2016

The Monetary Authority of Singapore (MAS) has announced establishing a dedicated anti-money laundering department aimed to combat illicit financial activities.

The regulator will set up a dedicated supervisory team in order to monitor illicit financing risks as well as carry out onsite supervision of how financial institutions manage these risks.

Before, these functions were carried out by different departments in MAS. Now, the new structure is to enhance supervisory focus.

Ravi Menon, Managing Director of MAS, said: “We will strengthen our supervision of financial institutions’ controls to combat money laundering and illicit financing. And we will enhance our enforcement capability to deter poor controls or criminal behaviour in the industry”.

Football Star accused of Tax Evasion through offshore companies

June 2nd, 2016

Lionel Messi, a 28-year-old 5-time World Player of the Year, and his father Jorge Messi were accused of using offshore companies in Belize and Uruguay in order to avoid over EUR 4 million in tax.

In his and his father’s trial over tax evasion, Messi insisited that he did not make attempts to avoid paying taxes on EUR 4.16 million of his income earned through the sale of his image rights from 2007-2009

When giving testimony in the court in Barcelona, the Argentina skipper said: “I didn’t know anything, all I know about is playing football and winning.” He also said: “I only knew that sponsors would pay X amount of money, that I had to do adverts, photos and things like that.” He declared that he had never read anything but I would sign where the lawyers said.

Tax authorities are asking that both Leo and his father serve about 2 years in jail for the offence, but the public prosecutor is only pursuing Messi Sr.

Jorge Messi, Leo’s father and co-defendant, had earlier claimed that he didn’t realise the Belize company that managed image rights deals didn’t pay taxes in Spain, and that he never informed his son of the details of sponsorship deals. “Since the start of Leo’s career I only tried to make his life easier,” he said.

Belize to enhance Anti-Money Laundering

May 22nd, 2016

To strengthen the jurisdiction’s safeguards against financial crime, Belize’s Financial Intelligence Unit and Belize Police have signed a memorandum of understanding.

The memorandum will strengthen the existing cooperation and facilitate the analysis and investigation of suspected money laundering, associated offenses, and the financing of terrorism. Implementation of the document is expected to increase the potential sources of information available to both the Financial Intelligence Unit and the Police in their fight against crime. Also, joint operations between the authorities will be possible.

The Financial Intelligence Unit is the Belizean authority dealing with the enforcement and implementation of all anti-money laundering and counter-terrorism financing regulations and the prevention of domestic tax evasion.