The 12th European Conference on Tax Advisers’ Professional Affairs, hosted by CFE Tax Advisers Europe and the Institut des Avocats Conseils Fiscaux (IACF), took place on Friday 29 November 2019; this year entitled “Making Anti-Money Laundering More Effective For Tax Advisers”. Two panels of expert speakers considered the international approach against tax and financial crime as well as the risks posed by the tax profession in facilitating money laundering based on the EU Commission’s Supranational Risk Assessments, compliance with the new and existing EU Anti-Money Laundering Directives and efforts taken to address money laundering in the broader international context and the effect this has on tax evasion.
With the introduction of various compliance obligations arising out of the EU anti-money laundering rules, that have been introduced by the 5th Anti-Money Laundering Directive (“AML”), panellists also discussed the issues of introduction of beneficial ownership registers and the related trends of making such registers public, as well as the existing FATF Standards and Recommendations that build on other EU transparency initiatives to prevent money laundering. As such, the panellists addressed the newly established regulatory environment as well as the background issues arising of various public revelations such as Panama Papers, how those affected the public, industries including tax advisory services and financial institutions, and how the OECD efforts in fighting money laundering by the unit on Tax & Crime address these problems.
The panel 1 discussion addressed the international approach against money-laundering, and was chaired by Dick Barmentlo, Delegate of the CFE Professional Affairs Committee. As the keynote speaker, Nilimesh Baruah from the OECD Centre for Tax Policy and Administration presented the OECD work related to tax and crimes. Mr Baruah discussed the increasingly complex and innovative forms of tax evasion and other financial crimes as well as the intrinsic link between such crime and the use of corporate vehicles. Coinciding with the 10th Anniversary of the OECD Global Forum on Tax Transparency and Exchange of Information, Mr Baruah highlighted the indispensable role of the Global Forum in improving the transparency tools worldwide and the role of the Forum in providing governments tools to exchange data on previously opaque information, and give enforcement authorities means to address issues arising from the opacity of such structures for the benefit of their citizens. Dr Kateryna Bogouslavska, Project Manager of the AML Basel Index and formerly a researcher at Chatham House explained the relevance of the Basel Index, a research based ranking of countries’ exposure to ML and TF risks. Dr Bogouslavska also discussed the tax related risks and the relevance for tax advisers of the data and analysis contained in the publicly available Basel AML index. In the same panel discussion, a UK perspective on the AML approach was presented by Samantha Bourton of the University of the West of Anglia, who described the UK as one of the pioneer jurisdictions in implementing key AML international obligations, often going well beyond the minimal requirements in EU legislation. Finally, Dr Robby Houben, professor of financial law at the University of Antwerp discussed the emergence and proliferation of cryptoassets and the risks for money laundering inherently contained in such new technologies largely based on distributed legers such as blockchain. In conclusion, Dr Houben suggested that the perceived risks need to be addressed with future-proof regulation and enforcement, rather than ‘blaming’ the technology itself, which should be harnessed for wider societal benefit.
The second panel examined the perceived risks posed by the tax profession in facilitating money laundering based on the EU Commission’s Supranational Risk Assessments, compliance with the new and existing EU Anti-Money Laundering Directives and efforts taken to address money laundering in the broader international context and the effect this has on tax evasion. The panel discussion was chaired by Heather Brehcist, Head of Professional Standards at the Chartered Institute of Taxation (UK) and Delegate of the CFE Professional Affairs Committee.
Panellists considered the effectiveness and the impact of existing EU rules and the new requirements of the 5th AML Directive, including making beneficial owners of legal entities registers public and providing increased access to information on the beneficial ownership. Speakers also discussed the impact of enhanced cooperation and exchanges of information provided for between the EU and Member States under the 5th AML Directive. In addition, panellists discussed compliance with and implementation of the measures by tax advisers in practice and the information available to supervisory bodies to facilitate their obligations under the Directive.
Wim Gohres and John Binns, Partner BCL Solicitors UK, presented the ML rules in practice. Mr Gohres presented the application and administration of the AML rules in practice from the perspective of an AML compliance officer in the Netherlands. Mr Binns highlighted the risks from a UK perspective, and the challenges and opportunities arising out of the potential regulatory divergence between the EU and the UK post-Brexit. Christian Leroy, a Member of the Board of the Conseil National des Barreaux, France, compared and contrasted the differences in the implementation of the European AML regime across EU jurisdictions, primarily identifying the issue of the original intent of the AML regime to apply to the financial sector, such as banks, and subsequently being adopted to the non-financial sectors. Lastly, Gary Ashford, Vice-President of CFE Tax Advisers Europe, discussed the approach to civil treatment of tax fraud, evaluating the possibilities and risks, the client perspective on such issues, reputational risks and transparency issues arising out of the international legal obligations such as DAC and OECD-based instruments for exchange of information. Mr Ashford highlighted the issues related to civil investigations of tax fraud, such as contractual disclosure facilities and the negotiated financial settlement.
Mr Bruno Gouthier, Executive Board Member of CFE Tax Advisers Europe and Partner at CMS Francis Lefebvre, closed the 12th European Conference on Tax Advisers Professional Affairs, commenting on the extent to which the professional landscape for tax advisers has changed in the past years and the importance of such discussions concerning obligations for tax advisers that are not necessarily related to their daily tax advisory role, but which have a significant impact on the exercise of the tax profession.