Criminal Finances Act (CFA) Risk Assessment Roadmap

Written on 8 Feb 2021

The Criminal Finances Act 2017 enacted a new corporate offence of failing to prevent the facilitation of tax evasion. The only defence available to this offence is for the organisation to demonstrate that it had reasonable procedures in place to prevent the facilitation of tax evasion.

HMRC guidance is that every organisation needs to conduct an objective and comprehensive risk assessment to identify any CFA risks that it may face.

The purpose of a CFA risk assessment is to assess the nature and extent of an organisation's exposure to the risk of those who act for or on behalf of the organisation (Associated Persons) engaging in activity during the course of business to criminally facilitate tax evasion. The risk assessment is therefore primarily concerned with looking at risk from the Associated Persons' perspective in order to identify whether they have the motive, opportunity and means to criminally facilitate tax evasion.

The risk assessment should not be viewed as a one off exercise, but should be repeated at regular intervals, and whenever significant new business is undertaken may alter the overall risk profile of the organisation. The risk assessment is the starting point in establishing reasonable prevention procedures.

Osborne Clarke's global compliance risk assessment roadmaps are designed to help businesses understand and identify key information and issues it will need to take into account to developing its approach to a wide range of Global Compliance areas. Having answered these questions, our Global Compliance experts can make an assessment of your policies and procedures and advise what measures to take to address any risks.

For more information, please get in touch with Katie Vickery or Chris Wrigley.

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