AUSTRALIA: ILLEGAL PHOENIX COMPANY ACTIVITY INDICATORS

AUSTRAC has produced a guide to identifying Illegal phoenix activity in the labour and payroll sector, explaining that this activity is when a company liquidates its operations to avoid paying its creditors, taxes and other regulatory payments.  Before liquidation, it goes on, the company transfers its assets to a newly created company.  The new company operates in the same, or similar industry and the same directors or close associates maintain control.  The guidance specifically focuses on entities suspected of illegal phoenix activity, fraudulent taxation claims and money laundering activities pertaining to labour hire and payroll services.  The introduction says that a recent report by PWC estimated the annual direct impact of illegal phoenix activity to be between A$2.85 billion and A$5.13 billion.  Those targeting a specific market, the guidance may have more general application for assessing and avoiding risk.

https://ngm.com.au/wp-content/uploads/2019/11/Illegal-Phoenix-Activity-Indicators.pdf

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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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