On 14th May, the Wolfsberg Group published its Guidance on Customer Tax Evasion.  The Wolfsberg Group is an association of 13 global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to KYC and AML/CFT policies. The Guidance is designed to provide Financial Institutions (FI) with an industry perspective on how to develop, implement and maintain an effective anti-tax evasion compliance programme – to promote a culture of ethical business practices and compliance with legal and regulatory requirements related to the prevention of tax evasion, including the facilitation thereof, and to help FIs prevent the use of their operations for criminal purposes.  While tax evasion facilitation risk is distinct from the underlying predicate offence (i.e. not governed by money laundering regulations), AML controls and procedures play an important role in the identification of tax evasion facilitation and it may, therefore, be fitting to consider both in tandem.  This publication should be read in conjunction with applicable guidance issued by authorities in jurisdictions where an FI conducts business.  The Group says that an effective anti-tax evasion compliance programme generally involves modifying and augmenting already existing financial crime compliance, conduct and tax related procedures and controls.  The Guidance includes a recommendation that FI should seek to adopt a risk-based approach to customer tax evasion related risks that enable focus on higher-risk customers, products and jurisdictions, as well as associated tax evasion facilitation risks, and documented risk-based tax evasion procedures supported by Senior Management.


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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