Close
 
 
 

Anti-tax evasion and anti-money laundering

 
 

Anti-tax evasion and anti-money laundering

Tax evasion means deliberately or dishonestly cheating the public revenue or fraudulently evading tax in any jurisdiction. It is also an offence to facilitate the evasion of tax by third parties.

Money laundering is concealing or converting illegal funds or property or making them look legal. It includes possessing or dealing with the proceeds of crime. Alongside money laundering, terrorist financing makes use of financial system weakness to provide funds and other assets to terror groups.

We must play no part in these activities.

 

No involvement in tax evasion or the facilitation of tax evasion

We must not:
  • evade taxes or facilitate tax evasion by another person (including another Group entity or any third party)
  • provide any assistance to someone who we know, or suspect is engaged in tax evasion

We must:

  • be aware of, and fully comply with, all taxation laws in jurisdictions where we operate
  • account for and pay all taxes that are properly due

It is a crime for any company or individual to evade taxes. Money not properly paid in tax may constitute the proceeds of crime.

It is also a crime to facilitate tax evasion by another company or individual (including other Group companies, our suppliers, customers and other business partners). This includes helping or asking a third party to evade taxes, being knowingly involved in their tax evasion, or otherwise taking an action that you know or intend will result in tax evasion in any country.

It is important to distinguish between legitimate tax planning and tax evasion, which can be difficult at times. If you are in doubt about the difference between tax planning and tax evasion, you should seek advice from your LEX Counsel.

 

Maintaining controls to prevent facilitation of tax evasion

Group Companies can be held responsible for the facilitation of tax evasion by their Employees or other third parties.

Group Companies must therefore maintain controls to prevent the risk that our Employees or business partners may facilitate tax evasion by another person or company. These controls should include:

  • full implementation of Group ‘know your customer’ and ‘know your supplier’ procedures, including the Supply Chain Compliance Procedure, to ensure proportionate due diligence is undertaken and appropriate controls are put in place
  • tax compliance and non-facilitation of tax evasion clause in contracts with third parties where appropriate
  • conducting and providing appropriate training and support to staff who manage relationships with third parties and/or our own tax obligations
  • investigating, and if necessary suspending and/or terminating, Employees and third parties suspected of tax evasion or facilitation of tax evasion

If you suspect that an employee, agent, contractor, customer, supplier or other business partner is evading taxes or facilitating the evasion of taxes, notify your local LEX Counsel immediately.

 

No involvement in dealing with the proceeds of crime

We must not:
  • engage in any transaction which we know, or suspect involves the proceeds of crime (including tax evasion), or
  • otherwise be knowingly involved directly or indirectly in money laundering activity

We must also ensure that our activities do not inadvertently contravene money laundering laws.

In most jurisdictions it is a crime for any person or company to engage in transactions involving assets which they know, suspect or have reason to suspect are derived from crime.

Breaching anti-money laundering laws can result in both corporate liability and personal consequences for individuals.

 

Refusing to accept large cash sums

We must refuse to accept, or report, the following cash sums:

Group companies in the EU must not accept cash payments over €10,000 (or equivalent) in any single transaction or series of linked transactions.

Group companies in the US (or outside the US when engaged in a transaction related to the US) must not accept cash payments over $10,000 (or equivalent) in any single transaction or series of linked transactions.

Group companies outside of these jurisdictions should also avoid accepting substantial cash payments.

 

Awareness of, and compliance with, relevant anti-terrorism measures

We must ensure that we do not knowingly assist in financing or otherwise support terrorist activity, and that our activities do not inadvertently breach any relevant anti-terrorist financing measures.

Group companies’ internal controls should include checks to ensure that they do not deal with any entity, organisation or individual proscribed by a government or international body due to its known or suspected terrorist links (including through full implementation of our Sanctions and Export Controls Policy and related Sanctions Compliance Procedures).

Terrorist groups may use similar methods as those employed by criminal organisations engaged in money laundering. This may include the use of legitimate businesses, from retail outlets to distribution or financial service companies, to finance their networks or otherwise move illicit funds. We risk inadvertently breaching anti-terrorist financing measures if we deal with such businesses, organisations or individuals.

We therefore need to be alert to the possibility that red flags for money laundering could also give rise to red flags of terrorist financing.

 

We must be alert to situations which ought to raise our suspicions as regards financial crime

 

Minimising the risk of involvement in financial crime and reporting suspicious activity

We must have effective procedures for:
  • minimising the risk of inadvertent participation in transactions involving the proceeds of crime, including monitoring for illicit money flows and other money laundering/terrorist financing red flags
  • detecting and preventing money laundering by Employees, officers, directors, agents, customers and suppliers
  • supporting Employees in identifying situations which ought to give rise to a suspicion of money laundering or terrorist financing
  • filing required reports relating to money laundering obligations with the appropriate authorities

Group Companies must ensure that their customer and supplier approval procedures ‘know your customer’, ‘know your supplier’ are adequate, risk-based, and ensure as far as possible that customers and suppliers are not involved in any criminal activity. This must include full implementation of the Third Party AFC Procedure.

We should promptly refer suspicious transactions or activity by any customer or other third party to our General Manager or Head of Function and local LEX Counsel. As a general point, you should not disclose or discuss with other colleagues, except where strictly necessary, that you have raised money laundering concerns as this may result in a ‘tipping off offence’ occurring.

 

We must be alert to situations which ought to raise our suspicions as regards financial crime, including the following red flags:

  • payments in non-invoice currencies or in cash or cash equivalents
  • payments from multiple sources to satisfy a single invoice, or other unusual payment methods
  • payments to or from an account that is not the normal business relationship account or that is located in a country unrelated to the relevant supply of goods or services
  • requests for overpayments or for refunds following an overpayment
  • payments by, through or to (or requests to supply our products to) unrelated third parties or shell/ shelf companies
  • payments or shipments by, through or to companies or individuals established, resident or operating in countries which have the reputation of being ‘tax havens’ or to bank accounts held in such countries
  • requests to deliver our products to an unusual location, adopt an unusual shipping route or importing and exporting the same products
  • false reporting, such as misrepresenting prices, misdescribing goods or services we provide, misrepresenting payable tax or shipping and invoice document discrepancies
  • failure by customers and suppliers to provide appropriate responses to any due diligence questions raised, including any tax registration details
  • suspicion that trade partners are involved in criminal activity, including tax evasion
  • unusually complex M&A or other transaction structures without clear commercial justification (Group companies must apply the M&A Transactions Compliance Procedure to all relevant transactions)

 

 

Who to talk to

  • Your line manager
  • Higher management
  • Your local LEX Counsel
  • Head of Compliance: sobc@bat.com