Is Government of India v Taylor really dead?

DOIhttps://doi.org/10.1108/eb027256
Pages377-382
Published date01 February 2000
Date01 February 2000
AuthorToby Graham
Subject MatterAccounting & finance
Journal of Money Laundering Control Vol. 3 No. 4
Money Laundering and Foreign Tax Evasion
Is Government of India v Taylor really dead?
Toby Graham
There has, for some time, been a debate over whether
the proceeds of evasion of foreign taxes fall within
money-laundering legislation contained in s. 93
Criminal Justice Act 1988 (as amended) ('the Act').
Those that argue for this interpretation seem to be
gaining the ascendancy. This may in part be because
government ministers and officials have repeatedly
stated the view that evasion of foreign tax is a
criminal offence like any other. This depends on
whether a court interprets 'criminal conduct', defined
in s. 93A(7) as follows, to include foreign tax evasion:
'conduct which constitutes an offence to which this
part of this Act applies or would constitute such an
offence if it had
occurred
in England and Wales or (as
the case may be) Scotland' (emphasis added).
The courts have had no opportunity to clarify the
position as no prosecutions have, as far as the
author can ascertain, been brought, let alone convic-
tions obtained in relation to foreign tax evasion. This
may suggest prosecutors are not as confident as
government ministers and officials over the inter-
pretation of s. 93A(7). What follows are arguments
for and against a wide interpretation to include
foreign tax evasion. For ease, 'handling,' is used as a
shorthand for the different activities in relation to
the proceeds of criminal conduct that give rise to
liability under ss. 93A to 93C of the Act and it is
assumed that the reader is familiar with the scheme
of these sections.
ARGUMENTS FOR SAYING CRIMINAL
CONDUCT WOULD BE INTERPRETED
TO EXCLUDE FOREIGN TAX EVASION
Background
In considering whether the proceeds of foreign tax
evasion come within the ambit of the Act, it is
important to understand the problem Parliament
was seeking to address in its definition of criminal
conduct. Section 93A makes it an offence to launder
the 'proceeds of criminal conduct'. In England and
Wales criminal jurisdiction is territorially based.
See,
for example, the Law Commission's report on
Jurisdiction over Offences of Fraud and Dishonesty
with a Foreign Element, which summarises the
position as follows:
'The rules governing criminal jurisdiction are those
of the common law, which are territorial in
character; our courts assume jurisdiction to try an
offence if, and only if, the offence is regarded as
having taken place in England and Wales.
Similarly, a statutory provision creating an offence
will, in the absence of other indication, be con-
strued as applying only to crimes committed in
England and Wales.'
The result is that crimes that take place abroad are not
normally considered to be 'criminal conduct' under
law in England and Wales. This traditional approach
would have meant the reach of the anti-money-
laundering legislation was confined to proceeds of
criminal conduct that took place in this jurisdiction,
only extending to conduct abroad where it is an
offence for which extra-territorial jurisdiction had
exceptionally been taken. Such offences include
murder, sex tourism and war crimes; these would
be unlikely to involve money laundering. Thus the
proceeds of lesser crimes committed abroad could
be laundered in England and Wales without com-
mitting an offence. Obviously this would not be
acceptable: Parliament's solution was to define
criminal conduct in s. 93A(7) to include 'conduct
which . . . would constitute such an offence if it
had occurred in England and Wales or (as the case
may be) in Scotland'. It seems unlikely that this
solution to overcome the traditional limitations of
criminal jurisdiction was intended to change the
principle, discussed below, that in the absence of
specific treaty provisions, this country will not
enforce revenue claims of another.
Goverment of India v Taylor
The Government of India brought proceedings
against the liquidators of an English company by
Journal of Money Laundering Control
Vol 3, No 4,
2000,
pp 377-382
Henry Stewart Publications
ISSN 1368-5201
Page 377

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