Civil recovery and tax evasion – Harry Travers and John Binns write for Money Laundering Bulletin

Civil recovery and tax evasion – Harry Travers and John Binns write for Money Laundering Bulletin

BCL partners Harry Travers and John Binns write for Money Laundering Bulletin on HMRC’s increased use of Account Freezing Orders.

Here’s an extract from the article:

It is well known by now that of the new powers added to the UK’s Proceeds of Crime Act 2002 (POCA) by the Criminal Finances Act 2017 (CFA), the most practically effective have not been the much-trumpeted Unexplained Wealth Orders (UWOs) but Account Freezing and Forfeiture Orders (AFFOs), a civil procedure for freezing and recovering funds in bank and building society accounts, with no need for criminal proceedings. Although the biggest headlines are generally reserved for the use of such powers by the National Crime Agency (NCA), we now know, thanks to figures released in response to a recent freedom of information request, that they are also increasingly well used by HM Revenue and Customs (HMRC) in their efforts to combat tax evasion.

POCA and tax evasion: an uneasy relationship

The relationship between POCA and tax evasion has never been an entirely easy one. In HMRC’s favour, POCA’s ‘all crimes’ approach means that tax evasion is a predicate offence for the purposes of both its civil recovery and money laundering provisions. That means that, even before the CFA, the proceeds of tax evasion have been civilly recoverable in the High Court, and acts of dealing with or making arrangements about them have been criminally prohibited. (They are also reportable to the NCA by regulated businesses, and by others who require defences to money laundering offences). HMRC have also had access to the same powers as the NCA in conducting investigations (although, curiously, it is the latter who are empowered to recover criminal monies through the tax system).

This article was originally published by Money Laundering Bulletin 9th June 2020. You can read the full version on their website here.

Harry Travers is a partner at BCL, specialising in business crime. He has had an involvement in numerous high profile commercial fraud and corruption investigations conducted by the Serious Fraud Office including ENRC, BAT, Serco, Balli Steel, Standard Bank, GPT/Airbus, Innospec, Libor, BAE and GP Noble. He was also inducted into the Legal 500 “Hall of Fame” in 2018, which recognises partners who are “at the pinnacle of the profession”.

John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.