After the approval of the agreed text by the Parliament on April 19, 2018, the European Council adopted a Directive on 14 May, 2018, regulating the European rules aimed at preventing money laundering and terrorism funding. These rules are the fifth in a series and the latest update of the European Anti-Money Laundering Directive, for which they have received the name 5AMLD.
5AMLD is aimed at improving the security in Europe by stopping the financing of criminal activities without preventing the normal functioning of payment systems. It is partly a response to the terrorist attacks in Europe in 2016 and introduces such major changes into the directive 2015/849:
verification of the client for virtual currencies;
public access to information about the real owners of companies;
strengthening of transaction checks with the participation of third countries with a high level of risk;
cooperation between financial intelligence units;
reduction of the threshold for identification of owners of prepaid cards from 250 to 150 Euro;
extension of the Directive to all tax advisers, agents, dealers, as well as suppliers of electronic wallets and cryptocurrency...
Until recently, offshore companies have been actively used by the Ukrainian entrepreneurs in international trade to reduce the tax burden and keep business confidentiality. We will consider in this blog whether the situation has changed in the conditions of global deoffshorization, and in particular, tightening of the Ukrainian legislation.
The field of trade has always been the simplest and most popular for offshore applications. One of the main goals of using offshore schemes in export-import transactions was to regulate the customs value of the goods, and, accordingly, the company‚Äôs trading profits. Offshore companies in such schemes were used as intermediaries between the seller and the buyer for the understatement of the value of goods during the export and overstatement - upon import.
However, the process of deoffshorization has reached our country. The provisions for the control of transfer pricing started working in the Ukrainian legislation. The Cabinet of Ministers has approved and periodically reviews the list of the countries with preferential taxation (it includes both classic offshores and jurisdictions, the income tax rate for the companies which have 5 or more...
Essence of the scandal
On April 29, a publication on the use of thousands of SLP in criminal activities appeared in the British newspaper The Times. According to the British officials, SLP was used through shills in complex schemes for money laundering. In particular, by means of the scheme, including more than 100 Scottish Limited Partnerships, about 58 billion pounds sterling, accumulated illegally, was withdrawn from Russia. More than 20 SLP was used in a fraudulent scheme, by means of which about 742 billion pounds sterling was withdrawn from Moldova. There is also a link between SLP and organized criminal groups from Eastern Europe for the purpose of conducting weapon delivery deals.
All this became a reason for the announcement of the beginning of struggle against fictitious companies by Britain. And on the next day, April 30, a consultative document was posted on the official website of the British government with a number of proposals on reforming the legislation on limited partnerships to reduce the risks of their use in criminal schemes.
Importance of Limited Partnerships
It is worth noting that a Limited Partnership (LP), including its Scottish form, continues to...
The Verkhovna Rada supported on second reading and in general the law ‚ÄúOn Limited Liability Companies and Additional Liability Companies‚ÄĚ (No. 4666) with technical and legal amendments. According to the Interfax-Ukraine Agency, 285 people‚Äôs deputies voted for the document.
As the Chairman of the Verkhovna Rada Committee on Economic Policy Andrey Ivanchuk (the fraction ‚ÄúPeople‚Äôs Front‚ÄĚ) has noted, presenting the law in the parliament, now this issue is regulated by the legislation adopted back in 1991. At the same time, according to the words of the official, limited liability company is the most popular type of Ukrainian companies, and today there are more than half a million of them.
Andrey Ivanchuk also added that regarding the law No. 4666, they received 503 amendments on second reading, 360 of which were taken into account.
The law provides that the value of the LLC‚Äôs share is established as of the day before the meeting of the LLC members, at which the decision to exclude the member from the LLC was made.
The transitional provisions of the document also contain the provisions for the compulsory acquisition of a share by a...
On June 23, 2017, the official government publication of Hong Kong published a draft amendment in the Ordinance on the companies (Companies (Amendment) Bill 2017). One of the changes it covered was the introduction of a requirement for the companies registered in Hong Kong to collect, store and provide up-to-date information on their beneficiaries for the verification. This refers to the so-called "Registers of people with significant control over the companies". This innovation was adopted within the framework of the international policy on combating money laundering and financing of terrorism and it is designed to bring the corporate jurisdiction legislation in the line with the standards of the Financial Action Task Force on Money Laundering. By analogy with the definition given by the FATF, in anti-laundering legislation of Hong Kong, "significant controllers" are defined as individuals and legal entities that:
directly or indirectly own more than 25% of the company's shares;
directly or indirectly have more than 25% of the voting rights of the company;
directly or indirectly have the right to appoint or remove the majority of the members of the company's board of...