Best Practices: Managing the Anti-Money Laundering and Counter-Terrorist Financing Policy Implications of Voluntary Tax Compliance Programmes
In June 2010, the FATF agreed to the following basic principles in relation to the AML/CFT policy implications of voluntary tax compliance programmes.
• Principle 1: The effective application of AML/CFT preventative measures is a prerequisite for addressing and mitigating the money laundering and terrorist financing risks associated with implementing any type of voluntary tax compliance programme.
• Principle 2: The FATF Recommendations do not allow for full or partial exemptions from AML/CFT requirements in the context of implementing a voluntary tax compliance programme. Therefore, when implementing a voluntary tax compliance programme, national authorities should ensure that its terms do not allow, in law or in practice, for full or partial exemptions from AML/CFT requirements as set out in the FATF Recommendations. Voluntary tax compliance programmes which do so are in breach of the FATF Recommendations.
• Principle 3: When implementing a voluntary tax compliance programme, it should be ensured that all relevant domestic competent authorities be able to co-ordinate and co-operate, and exchange information, as appropriate, with a view to detecting, investigating and prosecuting any ML/FT abuse of the programme.
• Principle 4: The widest possible range of mutual legal assistance and exchange of information in ML/FT investigations, prosecutions and related proceedings relating to the abuse of voluntary tax compliance programmes, including asset recovery investigations and proceedings, should be provided.
On the basis of these four basic principles, the FATF developed guidance for jurisdictions in their implementation of tax amnesty/asset repatriation programmes and to address the issue of what action should be taken in relation to jurisdictions implementing programmes not complying with the basic principles.
The FATF will continue to examine specific tax amnesty/asset repatriation programmes.
The FATF calls on its members, when considering the implementation of such a programme, to inform it directly and without delay if such a law is introduced. The FATF Plenary concluded that jurisdictions have to apply maximum transparency in time and substance when informing FATF on the execution of their AML/CFT mechanisms in the context of an amnesty law. The FATF will analyse the measures and respond appropriately in cases where the tax amnesty/asset repatriation programme breaches the basic principles or any future guidance in this area.