You are hereby informed of the following:
1. In February 2012, Financial Action Task Force, the body responsible to set standards and promote the effective implementation of measures for combating money laundering and terrorist financing, amended its recommendations, according to which, the definition of “predicate offence” includes serious tax offences related to direct or indirect taxes.
2. Article 3(4) of the European Commission’s Proposal on the prevention of use of the financial system for the purpose of money laundering and terrorist financing, which is still pending for adoption, states the following:
“criminal activity” means any kind of criminal involvement in the commission of the following serious crimes:………
(f) all offences, including tax crimes, as defined in national law of the Member States, related to direct taxes and indirect taxes, which are punishable by deprivation of liberty or a detention order for a maximum of more than one year or, as regards those States which have a minimum threshold for offences in their legal system, all offences punishable by deprivation of liberty or a detention order for a minimum of more than six months;
It is provided that the above mentioned definition may change with the adoption of the Proposal
3. According to section 51A of the Assessment and Collection of Taxes Law, as amended in December 2012, a person who is proved that fraudulently omits or delays to pay the amount of tax which is required to pay under this law, is quilty of a criminal offence, punishable if convicted with imprisonment of at least one year.
4. Additionally, according to Article 5 of the AML Law*, predicate offences are, amongst other, “all criminal offences punishable with imprisonment exceeding one year, as a result of which proceeds have been derived which may constitute the subject of a money laundering offence”.
Based on the foregoing, fraudulent tax evasion falls under the scope of the Prevention and Suppression of Money Laundering Activities Laws of 2007 to 2013.