Money Laundering & Tax Evasion

The FATF Recommendations provide that: “…Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences” “tax crimes (related to direct and indirect taxes)” were separately identified in the existing list of specific categories of offences that should be predicate offences for money laundering.

The OECD, Tax Fighting Global Principles state:

Including tax crimes as a predicate offence for money laundering is important because it means that:

• A person that has committed money laundering can also be charged with the underling predicate offence. This may allow the authorities greater scope to secure a conviction and / or to impose greater penalties. In practice, whether the investigation or prosecution of one or both offences are pursued will depend on the case and factors such as the nature of the evidence and the elements of the offence which must be proven.
• Financial institutions and other designated professionals and reporting entities are required to file suspicious transaction reports (STRs), which report suspicions that a client’s funds are the proceeds of a criminal activity, including money laundering as well as predicate offences. As such, STRs can include suspicions of where a client’s funds are the proceeds of tax crimes. This can provide greater intelligence from the private sector to the government authorities. In order for this to be more effective, awareness of the risks and indicators of funds being the proceeds of tax crimes is needed amongst the relevant reporting entities.
• STRs are analysed by the FIU and, where relevant, intelligence is disseminated to the domestic competent authorities responsible for investigating and / or prosecuting the relevant predicate offence. As such, it is possible for STRs to be shared by the FIU with the authority responsible for investigating and / or prosecuting tax crimes
• The mechanisms for international co-operation under the FATF Recommendations apply as between authorities that have responsibility for investigating and or prosecuting money laundering and predicate offences. Where tax crimes are included as predicate offences, those avenues for international co-operation are expanded to include authorities responsible for investigating and / or prosecuting tax crimes. This includes direct exchange of information and mutual legal assistance, both between tax investigatory and prosecution authorities and between tax and non-tax investigatory and prosecution authorities

The session will go into detail around tax evasion as a predicate offence, and red flags related to it. We will go through cases studies and examples, and understand what the role of the subject person is in such scenarios.

The Speaker

Ariane Azzopardi is a Director within the Quality and Risk Management function. She has over fifteen years’ experience in this field, and is the delegate of the Risk Management Partner at KPMG in Malta. She is involved in the implementation and monitoring compliance with quality and risk management policies and procedures in KPMG in Malta also handling compliance and risk management queries, including those related to the Prevention of Money Laundering and Financing of Terrorism (PMLFT) and ethics and independence. She delivers sessions on PMLFT at the KPMG roundtable and also at various other seminars and conferences.

Ariane is the chair of the PMLFT sub-committee at the Malta Institute of Accountants and a committee member of the PMLFT sub-committee at the Institute of Financial Services Practitioners.