February 16 2012 - Tax dodging is to become a more dangerous activity following a welcome new global move to encourage money-laundering investigations against the people and companies involved.
Until now, law enforcement authorities around the world have focused money laundering investigations on those handling money gained through other crimes such as drug trafficking and terrorism.
But today the Financial Action Task Force, a global organisation which advises Governments on how to fight financial crime, is recommending that tax evasion should also be a ‘predicate offence’ for money laundering.
This means that where tax evasion is found to have occurred, those involved in the crime may now be charged with money laundering as well as tax offences.
‘This is a very welcome move against tax dodging, which deprives poor countries alone of some $160 billion a year and undermines their ability to provide public services on which people’s lives depend,’ said Dr David McNair, Christian Aid’s Principal Adviser on Economic Justice.
‘By recommending that tax evasion become a predicate offence for money laundering investigations, the Financial Action Task Force is making tax evasion more dangerous for everyone involved in tax evasion, because the potential penalties will be higher.
‘The recommendation will affect the banks, accountants and lawyers who may be used to facilitate tax evasion, as well as the companies and individuals who are cheating their way out of paying what they owe.
‘We are however disappointed that the Task Force has not recommended action to ensure that companies’ real, human owners can always be traced. Criminals of all sorts are currently benefiting handsomely from the secrecy that surrounds the real ownership some companies – and inflicting damage on their societies, safe in the knowledge that they are very unlikely to be caught.’
While the Task Force’s recommendations do not have legal force, they have considerable influence over national and international laws.
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Notes to Editors:
1. Christian Aid works in some of the world's poorest communities in nearly 50 countries. We act where the need is greatest, regardless of religion, helping people build the lives they deserve.
2. Christian Aid has a vision, an end to global poverty, and we believe that vision can become a reality. Our report, Poverty Over, explains what we believe needs to be done – and can be done – to end poverty. Details at http://www.christianaid.org.uk/Images/poverty-over-report.pdf
3. Christian Aid is a member of the ACT Alliance, a global coalition of 100 churches and church-related organisations that work together inhumanitarian assistance and development. Further details at http://www.actalliance.org
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5. For more information about the work of Christian Aid visit www.christianaid.org.uk