Criminal Finances Act 2017

Criminal Finances Act 2017

Act of Parliament
Long title	An Act to amend the Proceeds of Crime Act 2002; make provision in connection with terrorist property; create corporate offences for cases where a person associated with a body corporate or partnership facilitates the commission by another person of a tax evasion offence; and for connected purposes.
Citation	2017 c. 22
Introduced by	Amber Rudd, Home Secretary (Commons) Susan Williams, Baroness Williams of Trafford (Lords)
Territorial extent	United Kingdom
Dates
Royal assent	27 April 2017
Other legislation
Amends	Proceeds of Crime Act 2002
Status: Current legislation
History of passage through Parliament
Text of statute as originally enacted
Revised text of statute as amended

The Criminal Finances Act 2017 (c. 22) is an Act of the Parliament of the United Kingdom that amends the Proceeds of Crime Act 2002 to expand the provisions for confiscating funds to deal with terrorist property and proceeds of tax evasion.

The Act received Royal Assent on 27 April 2017. ^[1] According to its long title, the purpose of the Act is to:

amend the Proceeds of Crime Act 2002; make provision in connection with terrorist property; create corporate offences for cases where a person associated with a body corporate or partnership facilitates the commission by another person of a tax evasion offence; and for connected purposes.

Part 3 of the Act creates the corporate offences of failure of a company or partnership to prevent facilitation of UK tax evasion and failure to prevent facilitation of foreign tax evasion offences. Technically these are two distinct offences, depending on whether the tax which is evaded is UK taxation or foreign taxation. Companies and partnerships are required to take 'reasonable' action to prevent the facilitation of tax evasion and Her Majesty's Revenue and Customs (HMRC), who are responsible for implementation of the legislation, argues that "the procedures that are considered reasonable will change as time passes". ^[2]

Hong Kong-based law firm, King & Wood Mallesons, has described the Act as "a highly effective piece of legislation". ^[3]

Provisions

The act introduced unexplained wealth orders, which allow the Serious Fraud Office, HM Revenue and Customs and other agencies to apply to the High Court for an order forcing the owner of an asset to explain how they obtained the funds necessary to purchase it. ^[4] The act introduced corporate criminal offences which reduced the bar for prosecuting businesses that enabled tax evasion. ^[5]

Applications

The Act was invoked, less than two weeks after its provisions on "unexplained wealth orders" came into force on 31 January 2018, to freeze £22 million of assets belonging to an unnamed oligarch. ^[6]

As of 2024, there had been no corporate criminal offence prosecutions under the act. ^[5]

References

1. "Criminal Finances Act 2017 - GOV.UK". www.gov.uk. Retrieved 30 March 2018.
2. HMRC, Tackling tax evasion: Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion, Government guidance, 1 September 2017, page 13, accessed 13 November 2017 Archived 28 September 2017 at the Wayback Machine
3. King & Wood Mallesons, Guide to the Criminal Finances Act Archived 10 November 2021 at the Wayback Machine , published 3 October 2019, accessed 29 June 2020
4. Garside, Juliette (14 October 2016). "Hundreds of properties could be seized in UK corruption crackdown". The Guardian. Retrieved 26 January 2026.
5. Siddons, Edward (21 January 2024) [2024-01-20]. "HMRC has not charged a single company over tax evasion under landmark legislation". The Observer. Retrieved 26 January 2026.
6. Mikhailova, Anna (28 March 2018). "Oligarch's £22m property frozen in crackdown on unexplained wealth, security minister reveals". The Telegraph. ISSN   0307-1235 . Retrieved 30 March 2018.