The AML Watchman’s view: I think that, in this hypothetical question, you would have to make an SAR to the UK’s SOCA and possibly even a consent request. My thought process is outlined below. But I’d love to hear what you would do and why? That is what the comment box below is for.
Why? Well unless the client came to you to regularise their entire tax affairs under the limited legal professional privilege (LPP), when you and your firm might be able to take advantage of legal professional privilege, you may want to consider whether or not you and your firm were being used to maintain possible criminal activity by not reporting the balance of the clients fund or activity.
How would you know whether the rest of the funds were legitimately obtained? The overseas reporting exception might not work. In this case although the Italian Government appears to have addresses the false book-keeping crime how could you know what other criminal infractions may have been committed in order to get the funds to your firm originally? So unless you are willing to expend a possibly huge amount in Enhanced Due Diligence and legal opinion the only way to be sure to manage your personal legal liability under PoCA, would be to disclose to SOCA.
Why might consent be required? The mention of organised criminals taking advantage of the Tax Amnesty should put you on warning that this possibility, no matter how slight, that a connection between a criminal gang and your client might exist. The only people who should know this should be SOCA and their law enforcement contacts. Giving them the opportunity to disrupt such a payment should, hypothetically address your liabilities under PoCA. If, however, a client were to ask your firm to organise or to effect a transfer toward the end of the amnesty period but the consent request then takes longer to process than the closing date of the Amnesty, then it’s a yippee skip round the Christmas Tree event for the lawyers.
Just a thought.
Anyway, over to you.
Why? Well unless the client came to you to regularise their entire tax affairs under the limited legal professional privilege (LPP), when you and your firm might be able to take advantage of legal professional privilege, you may want to consider whether or not you and your firm were being used to maintain possible criminal activity by not reporting the balance of the clients fund or activity.
How would you know whether the rest of the funds were legitimately obtained? The overseas reporting exception might not work. In this case although the Italian Government appears to have addresses the false book-keeping crime how could you know what other criminal infractions may have been committed in order to get the funds to your firm originally? So unless you are willing to expend a possibly huge amount in Enhanced Due Diligence and legal opinion the only way to be sure to manage your personal legal liability under PoCA, would be to disclose to SOCA.
Why might consent be required? The mention of organised criminals taking advantage of the Tax Amnesty should put you on warning that this possibility, no matter how slight, that a connection between a criminal gang and your client might exist. The only people who should know this should be SOCA and their law enforcement contacts. Giving them the opportunity to disrupt such a payment should, hypothetically address your liabilities under PoCA. If, however, a client were to ask your firm to organise or to effect a transfer toward the end of the amnesty period but the consent request then takes longer to process than the closing date of the Amnesty, then it’s a yippee skip round the Christmas Tree event for the lawyers.
Just a thought.
Anyway, over to you.
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1 comment:
Interesting point, Mark. With such a legal minefield, in the "old days" of early 2000-ish and before, one way out was to use the rationale that you, the UK MLRO, and lawyers could not know that the foreign client would not be known to be evading tax on his/her home domicile. Ergo, no SAR called for (head down below parapet). If there was a determination made that a disclosure was warranted in the UK -then there was a fast-track mechanism available to UK MLROs (unpublicised, as it were). Any other commentators ??
Regards & "tongue in cheek" !!
Keith
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