AML predicate offense of aggravated tax fraud and tax swindle: how to detect and assess tax fraud indicators?

Following the entry into force of (i) the Law of 23 December 2016, which amended (among others) Article 506-1 of the Criminal Code, and (ii) the CSSF circular 17/650, professionals subject to requirements regarding the fight against money laundering (AML) and terrorism financing must now take into consideration predicate criminal tax offences when carrying out their professional duties, in particular client due diligence and cooperating with the authorities.

Among other things, all these changes have led to questions such as:

• How should professionals apply this obligation to existing business relationships?
• Does it affect non-resident taxpayers?
• How does it impact professionals of internal organisational structures?

By the end of this course, participants will be able to:

• detect the negative indicators of aggravated tax fraud or tax swindle;
• identify the impacts of the due diligence obligations;
• list the risks and penalties of breaching the requirements.

1. Overview of the new regulations

• Analysis of the impacts that the CSSF circular 17/650 will have on assessing the risks of money laundering and terrorism financing
• Explanation and practical examples of the indicators listed in appendix 1 of the circular

2. Due diligence obligations

• How to note these suspicions in the internal control system
• What due diligence obligations to apply to avoid dealing with funds derived from tax evasion

3. Penalties

• What are the penalties of failing to adhere to the regulations?
• Who is affected by the regulations?

4. Practical cases

• Case study adapted to the industry

5. Q&A session

This training will be coordinated by Pierre Kirsch, Partner at PwC Luxembourg.

Pierre, Tax Partner, is an authorised manager of the PFS Tax Information Reporting department, overseeing all services related to tax transparency and automatic exchange of information.

With over 27 years of experience in the private banking and asset management industries in Luxembourg, Pierre has developed a profound understanding of their internal processes.
He has conducted various tax transparency analyses of the private and corporate client base of several major financial institutions in Luxembourg and abroad. The primary objectives of these analyses were to assess the level of risk posed by non-tax compliant clients and to formulate appropriate and measurable action plans.