Customer Tax Evasion Guidance

The Wolfsburg Group Guidance on Customer Tax Evasion was published on 14th May, 2019 and informs FI’s on how they can mitigate and manage the risks associated with money laundering in the form of illegal tax evasion. Addressing the financial crime risks posed to FI’s from clients using FI products and services to evade paying their lawful taxes and or facilitating a tax fraud scheme could not be more timely, as both tax evasion and tax fraud:

  • are now considered by FATF as a predicate offence for money laundering,
  • are included as one of three priorities of the IMF which require attention, alongside combatting terrorism and corruption;
  • is a G20 objective; and a UN sustainability goal

The objective of this Guidance is to help FI’s prevent the use of their worldwide operations for criminal purposes and to protect an FI’s reputation, recognising that tax evasion may be different to other forms of money laundering.

The guidance covers areas of a programme that should be considered by an FI in establishing measures to combat tax evasion by clients and importantly to ensure the FI is not in any way facilitating wittingly or unwittingly tax evasion. These include areas such as tone from the top, education and awareness, risk assessment, CDD and monitoring. The Guidance also addresses tax amnesties.

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