The new Criminal Finance Act may place ‘unmanageably onerous obligations’ on multinationals, barristers have warned.
Writing in this week’s NLJ, Nicholas Griffin QC and other practitioners at QEB Hollis Whiteman, note the ‘wide extraterritorial effect’ of the Act, which requires multinationals to foresee and prevent tax evasion risks on a global scale, and imposes criminal as well as regulatory sanctions.
Financial institutions with a branch in London will be ‘immediately liable for the acts of their associated persons on the other side of the world’, they write. ‘While this may have been entirely acceptable in the context of managing bribery risk—most corporates knowing what most forms of bribery look like—the perils are greater in respect of tax due to the considerably greater challenge in instituting, maintaining and enforcing “reasonable procedures” to prevent a spectrum of employee/agent misconduct which can in some quarters be as intricate and wide-ranging as the tax affairs they oversee.’ /p>
