International legal system for combating money laundering and unfair tax competition

Novikov Vladislav Sergeevich ORCID: 0000-0002-4715-9751 Postgraduate Student, Department of International Private and Civil Law named after S.N. Lebedev, MGIMO University 119454, Russia, Moscow, Prospect Vernadskogo, 76 vladislavnovikov077@gmail.com Other publications by this author

1. Activities of the Organization for Economic Cooperation and Development (OECD) to counteract "unfair tax competition"^[1].

In the context of the increasing complexity and diversification of global economic competition between states (including competition between the tax systems of states), the growth in the use of offshore financial centers by global business, the international legal regulation of offshore activities is being strengthened. It is becoming more and more substantive, aimed, in particular, at ensuring greater transparency of offshore financial centers, i.e. their openness to controlling state bodies on the basis of international legal agreements^[2]. In international practice, there is no generally accepted understanding of the terms "offshore financial center", "offshore zone", "tax haven"^[3]. This term is often used to refer to "tax-free jurisdictions", as well as jurisdictions with a nominal tax regime. The Organization for Economic Cooperation and Development (OECD) suggests using the term "offshore zone" or "tax haven" to understand a tax—free or low-tax jurisdiction in which laws or administrative practices have been adopted that prevent the effective exchange of information with other states about taxpayers benefiting from such jurisdiction; there is no transparency of the regulatory framework in an offshore jurisdiction, it also does not require a significant actual presence of the taxpayer when carrying out his business activities^[4], since it is enough to establish a "mailbox company", which in reality will carry out its operations and be managed on the territory of other countries.

In Russia, the term "offshore zones" refers to states and territories that provide preferential tax treatment and (or) do not provide for disclosure and provision of information during financial transactions^[5].

Historically, practical considerations of "circumvention" of currency regulation and currency control, protection of assets from creditors' claims in the jurisdiction of the property owner, and income tax evasion have acted as incentives to deposit^[6] mobile capital in "tax havens". The prosperity of the economies of offshore jurisdictions is explained by the presence of significant demand from investors for services in the field of banking, accounting and legal support of investments. Many countries of the Romano-German legal family (Liechtenstein, Luxembourg, the Netherlands) have adopted laws and created a convenient infrastructure for attracting foreign capital. For example, in the Netherlands, initial attention was paid to institutional investors, and infrastructure was created to serve foreign corporations around the world. In the USA, a certain part of the income of nonresident aliens from sources in the USA is not taxed by virtue of the instructions of the law; in the absence of obligations provided for by an international agreement, the competent authorities of the USA have the right not to disclose tax information to a foreign state ^[7], which allows indirectly recognizing the presence in this country of signs of an offshore financial center. Another example is Liechtenstein, in whose legislation the Anglo-American legal structure of the trust is incorporated in its pure form: according to Article 897 of the Law of February 19, 1926 "On Persons and Companies"^[8], the trustee (trustee), by agreement with the founder, undertakes to manage the movable or immovable property entrusted to him and its use on its own behalf as an "independent bearer of rights" (als selbst?ndiger Rechtstr?ger) for the benefit and in the interests of a third party (beneficiary); at the same time, the relationship of trust property (trust) has an effect against an indefinite circle of persons (mit Wirkung gegen jedermann zu verwalten oder zu verwenden). The Liechtenstein Law of February 19, 1926 "On Persons and Companies" follows the Law of England "On Trust Owners" of 1925^[9] and allows foreign trusts to conduct business and carry out operations on the territory of Liechtenstein directly without the need to use intermediate legal structures for these purposes. The classification of trusts in Liechtenstein actually repeats their Anglo-American typology: fixed, with a special purpose, discretionary, voting, established for business, controlled by the founder (grantor trust), arising by law without any intention of the parties to establish a trust (constructive) or, on the contrary, when the nature of the transaction clearly implies the intention of the parties to establish a trust (resulting), etc. The transfer of property to a trust can be designed in such a way that this property is "excluded" from circulation for an indefinite or sufficiently long period. In addition, according to Article 932a of the Liechtenstein Law "On Persons and Companies" of 1926, it is allowed to create a special business trust with an independent legal personality and legal personality (Treuunternehmen).

The validity of the efforts of the international community to achieve greater openness and transparency of the international movement of capital was confirmed by publicly disclosed information about shareholders, directors and financial transactions as a result of the leak of confidential documents of the Panamanian law firm Mossack Fonseca ("Panama Papers"^[10]) and the Bermuda company Appleby ("Paradise Papers"^[11]).

In 1998, the OECD report "Unfair (Harmful) Tax Competition: an emerging Global Problem" analyzed "unfair practices" not only in relation to traditional "offshore" zones, but also in relation to the largest industrialized countries. The key distinguishing features of "tax havens" (tax haven) are revealed: 1) the absence of taxes or the collection of nominal taxes only for appearance; 2) the existence of laws and administrative practices that allow individuals and legal entities to benefit and unjustified advantages from strict confidentiality rules and other protectionist measures that hinder the effective exchange of information with competent tax authorities; 3) lack of transparency in the functioning of legislative, executive and 4) attracting investments and significant transactions to the country by exclusively tax incentives for capital investments and by abolishing the requirement of actual presence on the territory of the country for conducting trade or business activities. Key distinguishing features of "malicious tax regimes" (which may exist in any state, not necessarily related to the "offshore zone" in the traditional sense): 1) a zero or low effective tax rate has been established for certain types of income; 2) the advantages of such a preferential tax regime are usually available only to non-residents; 3) if a non-resident enjoys these advantages, information about this is not transmitted to the competent authorities of the country that is the center of his vital interests and in which he is a taxpayer 4) a jurisdiction with a preferential tax regime does not exchange information on tax issues with other states.

Initially, the OECD project faced significant criticism: it seemed to many participants in the international community that the OECD, at that time consisting of 34 economically developed countries, was trying to impose its will on the rest of the world under the pretext of combating tax crimes, despite the fact that many OECD member states themselves were seen to participate in criminal and "unscrupulous" tax practices. The "tax havens" that came under the close attention of the OECD were small independent states whose economies largely depend on tourism and financial services. In response, the OECD report from 2001 states that the OECD's efforts are not directed against fair tax competition; the initiative aims to eliminate non—compliance with tax and regulatory requirements, and to achieve this goal, the ability of individuals to engage in legitimate tax planning should not be limited^[12]. Nevertheless, the OECD could not avoid criticism from developed countries: for example, in the USA there were concerns that the OECD's efforts were ultimately aimed at creating a kind of "tax cartel", eradicating tax competition in the world, as a result of which the US economy could be irreparably damaged^[13]; In addition, there were particular concerns that the OECD initiative could unreasonably undermine the stability of the fragile economic bloc represented by the Caribbean countries. In May 2001, the United States officially withdrew its support for initiatives conducted by the Organization for Economic Cooperation and Development^[14], and soon after that, the OECD first suspended and then completely canceled the implementation of its initiatives related to the application of sanctions to "tax-free" and "low-tax" jurisdictions^[15]. The US position on the OECD subsequently changed dramatically, and currently the US provides all possible active support to the Organization for Economic Cooperation and Development.

In a report published in 2000, the OECD identified a number of jurisdictions as "tax havens" in accordance with established criteria^[16]. In the period from 2000 to April 2002, 31 jurisdictions made formal commitments to implement transparency and information exchange standards. At that time, 7 jurisdictions (Andorra, Liechtenstein, Liberia, Monaco, Marshall Islands, Nauru and Vanuatu) refused to commit themselves to ensuring transparency standards, and therefore, in April 2002, the OECD Committee on Fiscal Affairs included these countries in the list of "tax havens that refuse to cooperate". All these jurisdictions subsequently committed themselves to implementing transparency standards and were excluded from the list of "non-cooperative" tax havens. Nauru^[17] and Vanuatu^[18] made commitments in 2003, and Liberia and the Marshall Islands in 2007. In May 2009, the Fiscal Affairs Committee decided to exclude all 3 remaining jurisdictions (Andorra, Liechtenstein, Monaco) from the list of tax havens that refuse to cooperate, since they committed themselves to implementing standards of transparency and effective information exchange, and also set a schedule for the implementation of relevant measures. Since 2009, no jurisdiction in the world has been included in the list of countries that refuse to cooperate in the exchange of information on tax issues.

In the 2000 report, the OECD also identified "potentially harmful" tax regimes that require special attention (Austria, Belgium, France, Germany, the Netherlands, the USA, Italy, etc.). At the time of the adoption of the new OECD report in 2004, the listed developed countries where unfair tax practices were identified or completely abolished the relevant tax the modes were either significantly modified by eliminating potentially harmful elements, or as a result of a more detailed study of such modes, they came to the conclusion that there were no signs of harmfulness^[19].

Further reports have been published by the OECD since 2000. For example, in a report dated November 14, 2001, the OECD identified 5 jurisdictions (Aruba, Bahrain, Isle of Man, Netherlands Antilles, Seychelles) that have officially committed themselves to eliminating harmful tax regimes; the period during which the jurisdictions included in the list of territories providing preferential tax treatment and (or) those that do not provide for disclosure and provision of information during financial transactions (list of offshore jurisdictions), must explicitly abandon harmful tax practices. In addition, the OECD report of November 14, 2001 amended the definition of a "tax haven" ("offshore zone"), excluding from these concepts such a qualifying feature as the abolition of the requirement of actual presence on the territory of the country for conducting trade or business activities (substantial activities test) ^[20].

In April 2002, the OECD published model agreements on the exchange of information in the tax field in two forms: bilateral and multilateral agreements. The model agreements were developed by the Global Forum on Transparency and Exchange of Information for Tax Purposes^[21], which at that time included representatives of several OECD member States, as well as Aruba, Bermuda, Bahrain, Cayman Islands, Cyprus, Isle of Man, Malta, Mauritius, Netherlands Antilles, Seychelles and San Marino^[22]. A distinctive characteristic of such agreements was that they did not provide for the automatic exchange of tax information: instead, the exchange of information is carried out at the official request of the competent authorities if there is evidence of the need for criminal prosecution of tax crimes^[23]. Since 2002, many offshore jurisdictions have concluded model agreements on the exchange of information in the tax sphere based on the OECD model^[24].

In 2004, the Global Forum on Transparency and Exchange of Information for Tax Purposes began work related to the verification of the system of legislative and executive acts of OECD member States and partners for compliance with the requirements of transparency and efficiency of information exchange on tax issues, in order to ensure that all OECD participants and non-OECD partner States uniform and identical "rules of the game" (level playing field) are guaranteed^[25]. The relevant reports published for the period from 2006 to 2010 review the results of the verification activities carried out^[26]. According to the 2009 report, 88 international agreements on the exchange of tax information (TIEA) were concluded between 2007 and 2009, out of 87 countries whose legal systems were examined and verified, a total of 40 countries by 2009 "substantially incorporated information exchange standards" by improving information exchange mechanisms with at least 12 OECD member States^[27]. From 2009 to January 2010, more than 300 tax agreements were concluded by countries seeking to achieve compliance with the regulatory requirements of the OECD^[28]. By 2012, 500 such agreements had been concluded.

In 2010, the Global Forum initiated the first stage of checking the level of tax openness and efficiency of information exchange in the OECD member States. The stage was completed in 2016, and 116 jurisdictions received assessments of compliance with standards and regulatory requirements ("compliant" / "largely compliant" / "partially compliant")^[29]. The dates of the second round of inspections are scheduled in a special schedule ^[30].

After the global financial crisis of 2008, all developed economies of the world have significantly increased the intensity of their efforts towards replenishing budget funds^[31] and expanding the tax base by obtaining the most complete information on income received by residents of these countries from abroad. In the United States, requirements have been introduced according to which all income tax taxpayers are required to indicate in the tax return information about any facts of transactions with countries included in the list of offshore jurisdictions. In Belgium, all corporations are required by income tax to indicate in the tax return information concerning the transfer of funds to beneficiaries, one way or another connected with offshore jurisdictions^[32].

The overwhelming majority of the member countries of the European Union supported the OECD initiatives to increase transparency of tax aspects of investors' activities in all countries (regardless of whether they belong to traditional "tax havens" or are part of the EU). At the same time, Austria, Belgium and Luxembourg initially refused to apply the recommendations and proposals of the OECD. A compromise in the negotiations was reached in the form of the adoption of the Directive of the Council of the European Union 2003/48/EC of June 3, 2003 "On taxation of income from savings in the form of interest payments"^[33]. A brief analysis of its main provisions is of practical interest. Firstly, EU member States that did not meet the OECD tax information exchange standards regarding the placement of deposits in one state by residents of another state had to withhold tax on savings income in the form of interest payments. Secondly, the term "income" means "interest on debt obligations of any kind" (regardless of whether such obligations are secured by a pledge /mortgage, the presence or absence of the right to participate in the capital and profit of the debtor company). The term "income" also refers to interest on government securities, bonds and debt instruments, discounts on the initial issue^[34]. Thirdly, a payment agent in one EU Member State making payments in favor of beneficiaries - residents of another EU Member State was obliged to notify the competent authorities of its State of all the details identifying the beneficial owner and the legal nature of the payment. Directive 2003/48/EC became invalid on January 1, 2016.

Belgium, Luxembourg and Austria initially rejected the application of Directive 2003/48. During the "transition period", these countries were not obliged to transfer information about the identity of the payee to the country of his residence, a standard withholding tax at fixed rates was applied, while part of the funds were subject to transfer to the country of which the beneficial owner was a resident. In November 2008, Directive 2003/48/EC was revised and supplemented to take into account the need for more efficient taxation of interest income that was transferred to non-taxable structures. At the same time, the scope of the Directive was expanded by including in the concept of "income" interest from investment products in the insurance market.  Belgium joined the exchange of information after the adoption of the royal decree of September 27, 2009^[35]. Luxembourg has officially assumed obligations to exchange tax information with EU member States since January 1, 2015^[36]. In 2017, the Luxembourg Tax Administration adopted a circular^[37] supplementing the Law of December 23, 2005 on the tax on income from savings^[38]. Austria has also joined the implementation of the OECD Standard on Automatic Exchange of information in the Tax field (CRS)^[39]. To date, the Directive 2011/16 on administrative cooperation in the field of taxation in its modern version is the basic regulatory legal act defining the interaction of EU Member States in the exchange of tax information^[40]. Directive 2014/107^[41] supplements Directive 2011/16 with provisions on the automatic exchange of information, incorporating into the text the "General Reporting Standard", which provides for the automatic exchange of information on financial accounts^[42]. According to G.P. Tolstopyatenko, the institutions of the European Union, "using the legal mechanism of harmonization of the legislation of the member states, implemented the acts of the "soft law" of the OECD into the national legislation of European states, while avoiding the differences that are always present when implementing international standards into national legislation"^[43]. There is an opinion in the domestic doctrine that the EU has succeeded to a greater extent than the Organization for Economic Cooperation and Development (OECD) in combating harmful tax competition. He owed this to his flexible political and legal instruments, in particular the 1997 Code of Conduct on Taxation of Entrepreneurial Activity, which established rules aimed at avoiding the use by states of "ring-fenced" tax mechanisms for the provision of tax benefits that adversely affect the conditions for the movement of capital between EU member states^[44].

Continuing the analysis of the activities of the OECD, it should be noted that in 2014 the G20 countries and the European Union took a set of consistent measures to create a global reporting standard and exchange information between tax authorities. As a result of the efforts of the Organization for Economic Cooperation and Development (OECD), a Standard for automatic information Exchange (Common Reporting Standards^[45]) was developed. The document is aimed at preventing global tax evasion using offshore jurisdictions, creating a single global standard for automatic exchange of tax information. This document differs from the US Law "On Taxation of Foreign Accounts" of 2010 (FATCA): unlike the Model 1 IGA CRS is intended for use in a much broader international context. The Standard on Automatic Information Exchange (CRS) contains requirements for the due diligence procedure, provisions on the procedure for determining jurisdiction; classification of investment structures; assets that are subject to disclosure; excluded accounts, etc.

Relatively recent initiatives of the OECD relate to the introduction of taxation mechanisms for multinational corporations. In 2013, the OECD published an Action Plan to Combat the Erosion of the Tax Base and the Withdrawal of Profits from Taxation (BEPS)^[46]. Currently, many of the initiatives proposed within the framework of BEPS have been successfully implemented. In 2021, reforms were initiated to redistribute the excess profits of the largest multinational companies to the source countries, as well as the introduction of a global minimum tax rate on the profits of international groups of companies^[47].

Currently, the OECD continues to work on improving the platform for global information exchange. Tax competition in the world is still very significant, but at least at the level of the international community, a consensus has been reached on the need to improve the standards of transparency and transparency of the work of tax authorities and banking structures and effective information exchange.

2. The activities of the Group for the Development of Financial Measures to Combat Money Laundering^[48] (FATF, hereinafter referred to as the "FATF"), and the methods and strategies developed by the Group to counter the financing of terrorism and the international legalization of proceeds from crime. The Financial Action Task Force on Money Laundering (FATF) is an intergovernmental organization founded in 1989, consisting of 37 participating States and 2 international organizations. Initially, the main activity of the FATF was the fight against drug trafficking. Today, the Group is engaged in the effective implementation of legislative, regulatory and operational measures to combat money laundering, terrorist financing and other factors threatening the stability of the international financial system. The FATF Group includes most of the OECD member States. At the first FATF meeting in 1990, a document entitled "Forty Recommendations" in the field of countering money laundering and terrorist financing was adopted. This document underwent significant changes and additions in 1996, 2003 and 2012^[49].

In October 2001, the FATF expanded its mandate to include the financing of terrorist acts and terrorist organizations, and adopted "Eight Special Recommendations" (later expanded to nine) on combating the financing of terrorism. These recommendations were included in the text of the "Forty Recommendations" in the 2012 edition. Later, the FATF's mandate^[50] was also expanded to include problems of financing the proliferation of weapons of mass destruction^[51].

FATF initiatives in the fight against the legalization of criminal proceeds (money laundering) include: 1) the formation of "Forty Recommendations" establishing a consistent system of international standards that should be implemented by States for the purposes of combating money laundering and terrorist financing, taking into account national circumstances; 2) identification of jurisdictions that pose a high risk of money laundering and terrorist financing and to which countermeasures should be applied; 3) dissemination of recommendations to non-financial organizations and professions that are not exclusively related to the provision of financial services; 4) conducting inspections for compliance with FATF standards (mutual evaluations); 5) assistance to national governments and financial organizations in obtaining adequate and relevant information about beneficial ownership.

The FATF's "Forty Recommendations" are aimed at weakening banking secrecy regimes, raising awareness of the international community about unusually large transactions and establishing a system under which banks, financial institutions and representatives of a number of non-financial organizations and professions will be required to notify government authorities about clients involved in ML/FT. From the point of view of tax and financial practice, a distinctive feature of the "Forty Recommendations" is that they prohibit financial institutions from maintaining anonymous accounts or accounts opened under obviously fictitious names; anonymous transactions are attributed to factors that are characterized by a high degree of risk of money laundering or terrorist financing. Financial institutions are required to take measures to properly verify clients^[52] when establishing business relationships; making certain types of electronic transfers, as well as one-time transactions (transactions) for an amount exceeding the established threshold value, and if the financial institution has doubts about the reliability or sufficiency of previously obtained data about the identity of the client. Financial institutions are required to keep for at least 5 years all necessary records of transactions (transactions), both domestic and international, in order to be able to respond promptly to requests from competent authorities for information. Financial institutions should, within reasonable limits, study the grounds and purpose of all complex, unusually large transactions (transactions) in which the client participates and which have no obvious economic or legal purpose. According to Recommendation 20, if a financial institution has sufficient grounds to believe that the funds are of criminal origin or related to the financing of terrorism, the institution must, by virtue of national law, immediately report its suspicions to a special financial unit.

In accordance with Recommendation 21, financial institutions, their directors, officials and employees enjoy immunity by law from criminal and civil penalties for violating the principle of professional secrecy of information obtained during the provision of relevant services to the client. Even if a contract or a law imposes restrictions on the disclosure of information, financial institutions have the right to inform government authorities about suspicious transactions, and they will not be responsible for disclosing information even if there was actually no sign of illegal activity. Financial institutions, their directors and employees are prohibited from informing the client about the facts of the transfer of suspicious transaction reports to a special financial unit (financial intelligence unit).

The FATF recommendations are not self-executing, i.e. they do not have direct binding effect in countries that have not issued special domestic acts for their application. At the same time, the FATF has the authority to determine the degree of success of the implementation of recommendations in the FATF member States through the mutual evaluations tool^[53]. For example, "Measures to Combat Money Laundering and Terrorist Financing - Russian Federation - Mutual Assessment Report"^[54] of 2019 contains an analysis of the level of compliance with 40 FATF Recommendations, as well as the level of effectiveness of the Russian AML/CFT system. The Report also provides recommendations for improving this system.

In June 2000, the FATF published a list of countries and territories that refuse to cooperate (Non-Cooperative Countries and Territories — NCCT^[55]). Initially, the list included jurisdictions traditionally related to "tax havens", as well as the Russian Federation (until 2003)^[56] and the Philippines. The publication of this list of jurisdictions was aimed at raising awareness of the international community about money laundering practices and the lack of adequate legislative instruments to control and prevent such violations in the relevant jurisdictions. The FATF recommended that participants in international trade should not make transactions with financial institutions located in countries included in the list of "non-cooperative" jurisdictions. In addition, it was allowed to apply unfavorable taxation regime and instruments of tax pressure to transactions of residents of such countries.

Since 2006, there have been no jurisdictions or territories on the list of countries that refuse to cooperate with the FATF (NCCT).

To date, the Financial Action Task Force on Money Laundering (FATF) maintains two types of lists:

1) A "black" list of jurisdictions with significant strategic deficiencies in the AML/CFT sphere, which requires such countries to take immediate action to eliminate deficiencies (North Korea and Iran^[57])^[58]. The FATF recommends applying countermeasures to such countries to protect the international financial system from the risks associated with the legalization of criminal proceeds and the financing of terrorism. Since the countries where these crimes are committed pose a threat to international financial stability, the FATF appeals to the participating States to encourage these countries to comply with the FATF standards.

2) The "grey" list of jurisdictions that are working on the formation of an action plan and the elimination of deficiencies and violations in close cooperation with the FATF (Albania, Barbados, Cayman Islands, Burkina Faso, Democratic Republic of the Congo, Uganda, Jamaica, Haiti, Jordan, Gibraltar, Mali, Mozambique, Nigeria, Philippines, Senegal, Tanzania, South Sudan, Turkey, United Arab Emirates, Panama, Syria, Yemen)^[59].

As countries improve their legislation in the field of combating ML/FT, the FATF excludes these countries from the "black" and "gray" lists.

In February 2001, the FATF published a report on "Typologies of money laundering" (the first typological report), which states that the ongoing efforts of States in the field of countering money laundering reduce opportunities and create significant obstacles to the legalization of criminally obtained funds. At the same time, persons engaged in money laundering turn to the services of professional financial consulting, legal and accounting support to give visible legitimacy to the sources of acquisition of property in order to conceal its criminal origin. Thus, professional consultants in the field of legal, financial and accounting support are a kind of "gatekeepers" who (acting intentionally or through frivolous negligence) open access to interested persons to various functional capabilities and advantages, which allows such persons to hide the criminal origin of funds^[60]. Thus, the FAFT report of February 1, 2001 marked the beginning of the concept of "control functions" (gatekeeping). For the first time, the report drew the attention of the international community to many issues, in particular: since lawyers involved in the establishment of trusts, the creation of companies or personal holding structures control the money laundering process from the very beginning, it is advisable to apply the same requirements to them as to banks and other financial organizations in terms of registration and reporting; despite despite the fact that the trust is one of the key legal institutions of the Anglo-American legal system, its practical use may be associated with illegal financial activities, and therefore the trust should be subject to regulation dedicated to combating money laundering.

In May 2002, the FATF Group published a "Consultation Document", which reveals in detail the meaning of the concept of "control functions" and suggests ways in which the "Forty Recommendations" can be applied to the activities of lawyers, notaries, trust managers^[61], etc. This document indicates 8 aspects of the abuse of the Anglo-American trust: 1) the trust is not necessarily established in writing; 2) the composition of the beneficiaries of the trust may not be defined, but only definable (depending on the discretion of the founder); 3) decisions concerning the management of the trust's property may not meet the requirements of transparency and openness; 4) trusts established for the purpose of asset protection (asset protection trusts), provide significant opportunities for abuse, especially if the parties have included in the agreement a clause (fleet clause^[62]) to change the conditions in case of certain circumstances, usually unfavorable. The FATF consultation document includes various proposals in this regard: in particular, it is recommended that all the essential facts of the trust (information about the beneficiaries, the founder, the purposes of the trust, the source of origin of the property transferred to the trust) be documented, and the documents themselves be kept for at least 5 years. Just like financial institutions, the trustee is obliged to report suspicious transactions if he has sufficient grounds to believe that the client/founder/beneficiary is involved in illegal activities. Issues related to the expediency of applying the principle of a closed list of possible forms of trust were discussed, and it is not surprising that this provision faced sharp criticism (regulation No. 222 of the Consultation Document).

The consultation document of 2002 contained an open invitation to all interested parties to discuss the proposed initiatives. Over 150 comments were attracted from various private groups around the world. On October 6, 2002, the comments received were examined at the FATF plenary session in Paris. Further discussions led to the adoption of the updated version of the FATF "Forty Recommendations" at the plenary session in Berlin on June 20, 2003^[63]. For the first time, a recommendation was made to extend the requirements of comprehensive customer due diligence and record-keeping requirements to non-financial organizations and professions (lawyers (lawyers)^[64], notaries, accountants, trust service providers^[65]).

In 2008, the FATF published for the first time the guide "Risk-based approach for legal professionals"^[66]. Regulation 11 of the Manual recognizes the principle of professional (in particular, lawyer's) secrecy. The Manual states that the activity of legal support of projects is associated with the provision of various kinds of services, which are characterized by significant distinctive features both in terms of methods of rendering services and in terms of time of interaction with the client. In June 2019, the FATF published an additional Guide for specialists in the field of jurisprudence^[67]. This manual contains a recommendation to conduct an assessment of risk factors at the stage before the lawyer interacts with the client (risks associated with the client himself; geographical risks (e.g., the place where the client permanently or predominantly resides, where the transaction is executed and where the funds come from); as well as risks associated with services and operations). The assessment of the cumulative risk of potential involvement in the process of money laundering or terrorist financing depends on the volume, nature and degree of complexity of the services that the lawyer undertakes to provide to the client. Any risk-oriented approach in the work of a lawyer should take into account the requirements of the country in which the legal support of the project is conducted, as well as the specifics of the services provided. A significant factor that needs to be taken into account is the unusual nature of the service, the particular degree of its riskiness and suspicion, taking into account the ethical principles of the profession and the conditions usually characteristic of regular legal practice of this type.

It should be said that the very concept of a "risk-based approach"^[68] was developed by the FATF in 2007. The concept allows countries, within the framework of FATF requirements, to flexibly apply a set of measures in order to more effectively concentrate their resources and efforts in the most effective way on the most vulnerable aspects characterized by high risk. Thus, the "risk-based approach" is a mechanism for the effective allocation of resources within the framework of the national AML/CFT regime^[69]. Factors that are characterized by a high degree of ML/FT risk and require the adoption of enhanced due diligence measures for the client include: the implementation of business relations under unusual circumstances (for example, with an inexplicably large distance between a financial institution and a client); the client is not a resident; the construction of a legal entity is used for property management; companies have nominee shareholders orand bearer shares; business intensively uses the cash form of settlements; the ownership structure of the company seems unusual or extremely complex, given the nature of the company's activities; business relationships or transactions (transactions) are carried out without the presence of parties; payments come from unknown or unrelated third parties, etc.

In June 2011, the FATF published the second consultation report "Preparation for the 4th round of mutual assessments"^[70], welcoming comments for the revision of individual recommendations related to due diligence of the client. It was necessary to determine more precisely the amount of information that is necessary and sufficient to identify clients-legal entities and understand the nature of the business, the structure of control and the regime of asset ownership. If a company aims to open an account or establish client relations, the FATF recommends analyzing its constituent documents (articles of association, local acts, trust agreement, partnership agreement, etc.). In relation to international trusts, it is necessary to identify the founder, trustee (trustee), protectors, beneficiaries, as well as persons exercising effective control over the trust. The idea of creating a centralized international register of trust structures has met with overwhelming criticism on the grounds of inefficiency of administration and violation of the fundamental right of privacy.

In 2018, the FATF increased its close attention to the aspects of concealing beneficial ownership. In the joint report of the FATF and the Egmont Group "Concealment of beneficial ownership"^[71] it is pointed out that the construction of a legal entity (e.g., business companies, foundations, corporations, business partnerships, etc.) serves as a necessary element of maintaining commercial and entrepreneurial activity, but at the same time criminals use a legal entity to hide beneficial ownership of assets: for example, they register companies that do not have independent operations, employees and any assets, as well as do not conduct permanent commercial activities; use bearer shares and bearer certificates for shares; use trusts that allow you to separate the legal title to assets from the beneficial title; establish "dormant companies" with inactive shareholders, directors and secretary, etc. Many forms of activityTI, the purpose of which is to stimulate the development and growth of commercial relations, such as limited liability companies and the services of nominee directors, can be used to facilitate money laundering, tax evasion and corruption. In Russia, in the context of concealing beneficial ownership until 2019, the main drawback was associated with the fact that existing systems did not achieve an appropriate level of transparency regarding information about beneficial ownership and control of legal entities. Today, Russia largely complies with FATF Recommendation 24, however, sanctions for violations remain insufficiently proportionate and do not have a proper deterrent effect^[72].

The FATF recommends that countries consider money laundering as a crime on the basis of the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (Vienna Convention) and the UN Convention against Transnational Organized Crime of 2000. (Palermo Convention). Predicate crimes cover an act committed in another country that constitutes a crime in that country, and which would constitute a predicate crime if it were committed in one's own country. This provision allows national courts not to take into account the criminal legislation of another country: money laundering and proceeds from criminal activity are criminalized, provided that the act would be recognized as a criminal offense if it were committed in their own country. Countries may provide that the only condition is that this act will be considered a predicate crime if it would have been committed in their own country.

FATF has provided a list of "established categories of crimes"^[73] so that each country, in accordance with its domestic legislation, can make decisions on how it will define these crimes, as well as decisions on the range of crimes covered by predicate crimes. The FATF does not define the concept of "money laundering" or "legalization of proceeds from crime". This issue is left to the discretion of the national legal systems of the FATF member States. Laundering of criminal proceeds is the conduct of various kinds of transactions and transactions with property obtained by criminal means, ensuring the transfer of funds or other property obtained by criminal means from the shadow economy to the legal one. Laundering of criminal proceeds is an activity by which the original origin and true owners of the property obtained as a result of the commission of a crime are hidden in order to exclude criminal prosecution: legally significant actions are performed with respect to the property to give visible legitimacy to the sources of origin of this property in order to conceal its criminal origin (the real sources of origin of the property), whichit makes it impossible to solve the crime, as a result of which criminal funds were obtained^[74].

The European Union also continues to implement a consistent set of measures to prevent the use of the EU financial system for the purposes of money laundering, as well as to improve the procedures for transmitting information about suspicious transactions, customer identification, etc. A total of five directives have been adopted:

• Directive 91/308/EEC^[75] Of the Council of the EU of June 10, 1991 on the prevention of the use of the financial system for money laundering (currently canceled). This directive was largely influenced by the 40 FATF Recommendations and required all participating States to establish a ban on the legalization of criminal proceeds by implementing various procedures for client identification, due diligence, and reporting. The directive concerned only income in the field of drug crimes.

• Directive 2001/97/EC^[76] of the European Parliament and of the Council of 4 December 2001 amending Directive 91/308/EEC (now repealed). This directive was adopted with the aim of extending the EU Council Directive 91/308/EEC of June 10, 1991 by extending the relevant regulation to other areas of criminal activity, expanding the scope of application by including a broader list of activities and professions not limited to the financial sector. The directive provides for stricter rules in comparison with US legislation and FATF recommendations. The directive stipulated that representatives of the non-financial profession (notaries, specialists in the field of law, accounting, etc.), credit and financial organizations and institutions, auditors, tax consultants, real estate agents, dealers should notify the monetary authorities and the financial intelligence unit of suspicious operations of their clients. Notaries and persons of the legal profession could transmit information to a self-regulatory organization (self-regulatory body). When transmitting information about suspicious transactions, it is prohibited to warn customers or third parties or otherwise notify them (tipping off) that the information is being transmitted to the competent authorities.

• Directive of the European Parliament and of the Council of the EU 2005/60/EC^[77] of October 26, 2005 "On preventing the use of the financial system for money laundering and terrorist financing" (currently canceled). This directive embodied to a large extent all the achievements of Directive 91/308/EEC of the Council of the EU of June 10, 1991, but contained additions and more detailed provisions concerning customer identification procedures (verification of the identity of the customer opening an account; stricter procedures for the supervision of transactions in excess of $15,000 and a stricter verification regime "politically significant persons" (politically exposed persons) and their family members; fines for failure to comply with the obligation to notify national financial intelligence units of suspicious transactions). In addition, the list of persons affected by this directive has been expanded to include insurance intermediaries, service providers in the field of support of trust and corporate structures (trust service providers). 

• Directive of the European Parliament and of the Council of the EU 2015/849^[78] of 20 May 2015 "On the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, on the amendment of Regulation (EC) 648/2012 of the European Parliament and of the Council and on the repeal of Directive 2005/60/EC of the European Parliament and of the Council and Directive 2006/70/EC of the European Commission" (currently in force). The new directive includes the risk-based approach of the 40 FATF Recommendations (risk-based approach of the 40 Recommendations), revises the standards of customer due diligence, including identification and obtaining complete information about beneficial ownership, as well as expanding the scope of administrative sanctions for non-compliance with regulatory requirements.

In the European Union, high-profile court cases related to tax evasion and money laundering by prior agreement have recently been considered. In April 2015, a criminal case was initiated in France against Guy Wildenstein against the branch of the Royal Bank of Canada (RBC) located in the Bahamas^[79] on the grounds of assisting in fraudulently evading inheritance taxes in France^[80]. In 2014, the Swiss branch of HSBC bank holding helped a client involved in the transportation of diamonds by creating shell companies in the British Virgin Islands and Panama to conceal property and evade taxes in Belgium^[81]. Thus, sanctions for illegal tax evasion in the EU have the widest scope of application.

Directive 2018/843^[82] of the European Parliament and of the Council of 30 May 2018 is currently in force in the EU, amending Directive (EU) 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing and amending Directives 2009/138/EC and 2013/36/EC. This Directive was adopted on June 19, 2018 as a reaction to a number of terrorist attacks that occurred in different parts of Europe, as well as against the background of publicly disclosed information about financial transactions as a result of the leak of confidential documents of the Panamanian law firm Mossack Fonseca ("Panama Papers"^[83]). The purpose of the directive is to increase the transparency of the real owners of companies and trusts by creating publicly accessible registers of companies, trusts and beneficial owners; combining all registers of beneficial owners at the EU level; expanding the capabilities of EU financial intelligence units and providing them with access to extensive information to perform their tasks; limiting anonymity in relation to virtual currencies and suppliers of wallets (electronic money products), as well as prepaid cards; extension of the rules for the provision of services in the tax sphere, as well as in the field of art trade; expansion of criteria for assessing third countries with a high level of risk; creation of registers of accounts and search engines in central banks in all member statesEU member states; improving cooperation and expanding the exchange of information between anti-money laundering supervisory authorities. Registers of beneficial owners are public, access to information is provided without any obstacles to any person who can prove the existence of a legitimate interest. For example, with the adoption in France of the corrective Law on Finance of July 30, 2011, a comprehensive extraterritorial taxation regime of trust property (trust) was created in this country, which is applied if one of the above conditions is present: a French resident is recognized as the founder or beneficiary of the trust, or the assets are actually located on the territory of France ^[84]. The purpose of this regime is to extend the effect of the property tax on assets transferred to such a trust and to ensure the receipt of mandatory payments to the national budget. The scope of this law was expanded in 2013 with the adoption of the Law "On Countering Financial Crimes and Tax Evasion"; the new law provided for unique measures in terms of declaring assets – a public register of trusts was created, to which unhindered access was opened in 2016. The Constitutional Court of France (Conseil Constitutionnel) has recognized that the existence of this registry is nothing more than a disproportionate violation of privacy; the political (constitutional) purpose of effectively countering tax evasion cannot justify such a violation. Until July 9, 2018, judicial, tax, customs authorities, as well as a special unit of the Ministry of Economy "TRACFIN" had access to the register. Considering that since July 2018, with the adoption of the Fifth Directive in the EU (2018/843/EC), EU member States have been combining registers of beneficial owners of companies and trust structures, it is likely that the issue of the constitutionality of public registers will soon be the subject of consideration in new court sessions.

^[1] The problems of this section of the article became the subject of scientific research or were indirectly analyzed in the domestic legal doctrine in the following works: Starzhenetskaya L.N. The fight against tax evasion through offshore companies: new models of international information exchange // Taxman. 2013. No. 1; Berberov A.B. On multilateral tax agreements: The first component of the OECD and the tax policy of Russia // Law. 2022. No. 11; Khudyakova L. A new stage of global tax reform // World Economy and International Relations. 2022. Vol. 66, No. 8; Yulgusheva L.S. The role of international treaties in improving tax control // Finance. 2023. No. 2; Zakharov A.S. Formation of the EU tax law system: Dissertation for the degree of Candidate of Legal Sciences: 12.00.14. M., 2010; Kurdyaev A.E. Financial and legal regulation of tax harmonization in the European Union: Dissertation for the degree of Candidate of Legal Sciences: 12.00.04. – Moscow, 2013; Mambetalieva A.N. Harmonization of tax legislation within the framework of interstate economic associations (on the example of the Customs Union and the Single Economic Space): Dissertation for the degree of Candidate of Legal Sciences: 12.00.04. – M., 2013; Kasanova E.D. Legal foundations of international cooperation in the field of avoidance of double taxation and prevention of tax evasion: Dissertation for the degree of Candidate of Legal Sciences: 12.00.04. – M., 2014; Laboskin M.A. International legal regulation of cooperation between states in the field of taxation: Dissertation for the degree of Candidate of Legal Sciences. 12.00.10. – St. Petersburg, 2007; Laryutina I.A. Avoidance of double taxation and tax evasion in international tax law: Dissertation for the degree of Candidate of Legal Sciences. 12.00.14. – M., 2002; Shakiryanov A.A. Legal problems of avoidance of double taxation (on the example of Russia and the states of the European Union): Dissertation for the degree of Candidate of Legal Sciences. 12.00.14. – M., 2006; Basov A.V. Legal aspects of taxation of investment activity in the Russian Federation: Dissertation for the degree of Candidate of Legal Sciences. 12.00.14. – M., 2002; Gerasimenko N.V. Legal regulation of international tax competition // Legislation and Economics. 2005. No. 9; Shakhmametyev A.A. Legal regime of taxation of non-residents in the Russian Federation: Dissertation for the degree of Doctor of Law: 12.00.14. – M., 2011; Ivanov D.O. Regulation of corporate profit taxation in EU law: Dissertation for the degree of Candidate of Legal Sciences: 12.00.14. – Moscow, 2009.

^[2] See: Petchenko M.M. International legal problems of functioning of offshore financial centers: Dissertation for the degree of Candidate of Legal Sciences: 12.00.10. – Moscow, 2008.

^[3] The practice of providing unreasonable tax advantages to non-resident companies also exists in a number of countries that do not belong to traditional "offshore zones".

^[4] OECD. Harmful Tax Competition: An Emerging Global Issue (1998). — OECD Publications, France: Paris. ISBN 92-64-16090-6 – ¹ 50097, 1998. P. 23. [Electronic resource]. https://www.oecd.org/ctp/harmful/1904176.pdf.

^[5] Order of the Ministry of Finance of the Russian Federation dated 13.11.2007 No. 108n (ed. dated 02.11.2017) "On Approval of the List of States and Territories providing Preferential Tax treatment for Taxation and (or) not providing for disclosure and provision of information during Financial Transactions (Offshore zones)" (Registered with the Ministry of Justice of the Russian Federation on 03.12.2007 No. 10598) // Bulletin of Regulatory acts of federal executive authorities of December 10, 2007 No. 50.

^[6] It seems that in terms of the volume of cash flows, a distinction should be made between "the passage of capital through offshore jurisdictions" and "the deposit of capital in offshore jurisdictions". Asset transit is much more common in practice.

^[7] 26 U.S. Code § 6103 — Confidentiality and disclosure of returns and return information // www.uscode.house.gov.

^[8] Personen- und Gesellschaftsrecht (PGR) vom 20. Januar 1926 // LGBI, 1926 ¹ 004, LR ¹ 216.0 - www.gesetze.li.

^[9] Trustee Act 1925 (UK) // UK Public General Acts 1925 c. 19 (Regnal. 15_and_16_Geo_5).

^[10] Obermayer B., Obermaier F. The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money. — Oneworld Publications, 2016. pp. 384; Bernstein J. Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite. — Henry Holt and Co. 2017. pp. 352; Sanctis Fausto M. International Money Laundering Through Real Estate and Agribusiness: A Criminal Justice Perspective from the «Panama Papers». — Springer International Publishing, 2017. pp. 151.

^[11]Beglez P., Gearing A. The Panama and Paradise Papers: The Rise of a Global Fourth Estate // International Journal of Communication 12, 2018. pp. 4573–4592.

^[12] Hammer R., Owens J. OECD: Promoting Tax Competition // OECD official website: https://www.oecd.org/tax/harmful/1915964.pdf.

^[13] See more similarly: Townsend A. The Global Schoolyard Bully: The Organization for Economic Co-operation and Development’s Coercive Efforts to Control Tax Competition // Fordham International Law Journal, Vol. 25, Issue 1, Article 7, 2001. pp. 215-258.

^[14] Sullivan M. Lessons from the Last War on Tax Havens // Tax Notes, July 30, 2007. pp. 329.

^[15] At the same time, the United States insisted that the OECD conclude bilateral agreements with offshore jurisdictions on the exchange of tax information on the model of the agreement concluded between the United States and Bermuda.

^[16] OECD (2000) Towards Global Tax Co-operation: Progress in Identifying and Eliminating Harmful Tax Practices. - France: OECD Publications, 2000. pp. 1-30.

^[17] Nauru is Removed from OECD List of Uncooperative Tax Havens // OECD official website: https://www.oecd.org/ctp/nauruisremovedfromoecdlistofuncooperativetaxhavens.htm.

^[18] Vanuatu Makes Commitment and is Removed from OECD List of Uncooperative Tax Havens // OECD official website: https://www.oecd.org/ctp/harmful/vanuatumakescommitmentandisremovedfromoecdlistofunco-operativetaxhavens.htm.

^[19] The OECD’ Project on Harmful Tax Practices: The 2004 Progress Report // OECD official website: https://www.oecd.org/tax/beps/oecd-harmful-tax-practices-project-2004-progress-report.pdf.

^[20] The OECD's Project on Harmful Tax Practices: Progress Report 2001 // OECD official website: https://www.oecd.org/ctp/harmful/2664450.pdf.

^[21] In 2016, the Russian Federation successfully passed the Global Forum's verification of compliance with the requirements for confidentiality and data protection, which is a prerequisite for joining the system of automatic information exchange within the framework of the Unified Reporting Standard (CRS).

^[22] OECD Releases Model Agreement on Exchange of Information in Tax Matters // OECD official website: https://www.oecd.org/newsroom/oecdreleasesmodelagreementonexchangeofinformationintaxmatters.htm.

^[23] OECD Agreement on Exchange of Information on Tax Matters, Commentary // OECD official website: https://www.oecd.org/ctp/exchange-of-tax-information/2082215.pdf.

^[24] E.g., OECD welcomes tax information exchange agreement between Australia and Bermuda // OECD Official website: https://www.oecd.org/ctp/oecdwelcomestaxinformationexchangeagreementbetweenaustraliaandbermuda.htm ; OECD welcomes tax information exchange agreement between Isle of Man and the Netherlands // OECD Official website:https://www.oecd.org/tax/exchange-of-tax-information/oecdwelcomestaxinformationexchangeagreementbetweenisleofmanandthenetherlands.htm.

^[25] OECD Tax Co-operation: Towards a Level Playing Field — 2006 Assessment by the Global Forum on Taxation. - OECD Publishing, 2006. pp. 250.

^[26] See the latest version: OECD Tax Co-Operation 2010: Towards A Level Playing Field. — Organization For Economic Co-Operation & Development, 2010. pp. 311.

^[27] OECD Tax Co-Operation 2009: Towards A Level Playing Field. — OECD, 2009. P. 18. These countries include Argentina, China, Russia, Slovenia, Spain, Turkey, Great Britain, USA, British Virgin Islands, Estonia, Finland, France, Mexico, Malta, Netherlands, Isle of Man, Norway, Israel, Italy, Japan, Jersey, Korea, Poland, Portugal, etc.

^[28] A Progress Report on OECD Work on Tax Havens // OECD Official website: https://www.oecd.org/ctp/harmful/aprogressreportonoecdworkontaxhavens.htm.

^[29]OECD Exchange of Information on Request: Handbook for Peer Reviews, 2016-2020. — OECD Publishing, 2016, pp. 261.

^[30] Schedule of Round 2 peer reviews, 2016-2025 (last update: September 2022) // OECD Official website: https://www.oecd.org/tax/transparency/documents/schedule-of-reviews.pdf.

^[31] For reasons of illegal tax evasion of residents, as well as for objective reasons, states began to experience a decrease in tax revenues to the budget and tried to compensate for this by strengthening control and introducing new measures aimed at countering tax evasion (prohibition of abuse by taxpayers of their rights, prohibition of unjustified tax benefits, the concept of fake transactions, the predominance of substance above the form, the rules of transfer pricing, the rules of insufficient capitalization, the rules of taxation of controlled foreign companies, the construction of beneficial ownership, the provisions on the limitation of benefits (limits on benefit), etc.).

^[32] Moreau P. Reporting obligation for payments to tax havens: new administrative guidelines released // Ernst&Young Official website: https://www.ey.com/en_be/tax/tax-alerts/2022/reporting-obligation-for-payments-to-tax-havens-new-administrative-guidelines-released . See also: Circular letter nr. Ci.RH.421/607.890 of 30.11.2010, Addendum of 28.07.2011, Addendum of 22.11.2012, Addendum of 03.09.2015, Addendum of 07.12.2015; Circular letter 2017/C/6 of 26.01.2017; Circular letter 2017/C/14 of 22.03.2017; Circular letter 2017/C/66 of 27.10.2017; Parliamentary Question n° 18.888 (MATHE?) of 30 June 2021; Ruling 2017.011 of 7 February 2017.

^[33] Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments // OJ L 157, 26.6.2003, p. 38-48. (document expired)

^[34] The Directive applied to income in the form of interest payments. Categories such as dividend income (dividends), capital gains and other types of income are excluded from the scope of its application.

^[35] Arr?t? Royal du 27 septembre 2009 d'ex?cution de l'article 338bis, § 2, du Code des imp?ts sur les revenus 1992 // Service public federal finances [Electronic resource]: https://etaamb.openjustice.be/fr/arrete-royal-du-27-septembre-2009_n2009003375.html .

^[36] Centi E., Eber P., Verbeken A. Common Reporting Standard - Luxembourg law on automatic exchange of information in tax matters published // Deloitte Operational Tax News, 2015. Electronic Resource: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/tax/operationaltaxnews/lu-otn-crs-update-30122015.pdf.

^[37] Circular Relibi ¹1 24 February 2017 // Le Gouvernement Du Grand-duch? de Luxembourg Official website: https://impotsdirects.public.lu/content/dam/acd/fr/legislation/legi17/Relibi_1_27022017.pdf.

^[38] Relibi Law dated 23 December 2005, introducing the final withholding tax on savings income, Mem. A, 2005, ¹ 214, 28 December 2005, p. 3366 — 3368.

^[39] Declaration on Automatic Exchange of Information in Tax Matters 2014. — OECD Paris, 2014. pp. 1-4.

^[40] Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC // OJ L 64, 11.3.2011, p. 1–12.

^[41] Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation // OJ L 359, 16.12.2014, p. 1–29.

^[42] See directives supplementing Directive 2011/16: Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation // OJ L 332, 12/18/2015, p. 1-10; Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation // OJ L 146, 3.6.2016, p. 8-21; Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities // OJ L 342, 12/16/2016, p. 1-3; Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements // OJ L 139, 5.6.2018, p. 1-13.

^[43] Tolstopyatenko G.P. Integration tax law and the new world order // Actual problems of Russian law. 2020. Vol. 15. No. 11. p. 31.

^[44] See in more detail: Zakharov A.S. The formation of the EU tax law system: Dissertation for the degree of Candidate of Legal Sciences: 12.00.14. Moscow, 2010.

^[45] Standard for Automatic Exchange of Financial Account Information in Tax Matters. — OECD Publishing: Paris, 2017. pp. 321; Standard for Automatic Exchange of Financial Information in Tax Matters - Implementation Handbook. — OECD, Paris, 2018. pp. 170.

^[46] Action Plan on Base Erosion and Profit Shifting. — OECD Publishing, 2013.

^[47] Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy // OECD official website: https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf

^[48] The problems of this section of the article became the subject of scientific research or were indirectly analyzed in the domestic legal doctrine in the following works: Dostov V.L. New concepts in the implementation of identification procedures // Effective anti-crisis management. 2017. No. 6; Starostina M. The use of cryptocurrencies through the prism of the recommendations of the Group for the Development of Financial Measures to Combat Money Laundering (FATF) // Banking. 2018. No. 11; Lykov A.A. Implementation of the recommendations of the Financial Action Task Force on Combating Money Laundering (FATF) on virtual assets: a comparative legal perspective // International criminal law and international justice. 2019. No. 2; Filatova M.A. Legalization (laundering) of funds or other property acquired by criminal means: some aspects of designation in Russian and foreign law // Bulletin of the Moscow University. Ser.11. Pravo. 2012. No. 5; Shashkova A.V. International standards of the FATF 2012 // Moscow Journal of International Law. 2015. No. 3; Aliev E.B. On the question of the concept and role of offshore zones // Bulletin of MGIMO University. 2013. No. 6; Melkumyan K.S. FATF in countering the financing of terrorism (specifics of the approach) // Bulletin of MGIMO University. 2014. No. 1; Starodubtseva E.B. The practice of risk management of legalization (laundering) of proceeds from crime: international and Russian experience // Currency regulation. Currency control. 2016. No. 2; Dostov V.L. Identification of clients in the retail financial services market: FATF requirements and Russian practice // Banking. 2016. No. 3; Velikova E.E. Financial measures in the fight against money laundering: legislative aspects // Finance. 2016. ¹ 8.

^[49] The FATF's "Forty Recommendations" is a comprehensive system of measures to be implemented by States for the purposes of combating money laundering, terrorist financing and the proliferation of weapons of mass destruction. The Recommendations are designed in such a way as to allow States to implement international AML/CFT standards in a manner that is maximally adapted to specific circumstances.

^[50] Mandate of the Financial Action Task Force (Approved by the Ministers and Representatives of the Financial Action Task Force) 2019. — Washington, DC, 2019. [Electronic resource]: https://www.fatf-gafi.org/media/fatf/content/images/FATF-Ministerial-Declaration-Mandate.pdf.

^[51] FATF — What We Do // FATF Official website: https://www.fatf-gafi.org/about/whatwedo/.

^[52] The use of reliable, independent primary documents, data or information; the identification of the beneficial owner and the adoption of such reasonable measures to verify the identity of the beneficial owner that will allow the financial institution to believe that it knows who the beneficial owner is. For legal entities and entities this should include obtaining information from financial institutions about the management structure and ownership of the client; understanding and, where necessary, obtaining information about the purposes and intended nature of the business relationship; conducting on an ongoing basis due diligence of the business relationship and a thorough analysis of transactions made within such relationships to ensure that the transactions conducted correspond to the information of the financial institutioninformation about the client, his business activities and the nature of risks, including, when necessary, the source of funds.

^[53] See: FATF — Topic: Mutual Evaluations // FATF Official website: https://www.fatf-gafi.org/publications/mutualevaluations/?hf=10&b=0&s=desc (fatf_releasedate); See also: Anti-money laundering and counter-terrorist financing measures Russian Federation - Fourth Round Mutual Evaluation Report // FAFT, Paris, 2019 - https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Mutual-Evaluation-Russian-Federation-2019.pdf.

^[54] Anti-money laundering and counter-terrorist financing measures - Russian Federation - Mutual Evaluation Report (December 2019) // FATF official website: https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Mutual-Evaluation-Russian-Federation-2019.pdf.

^[55]FATF - About the Non-Cooperative Countries and Territories (NCCT) Initiative // FATF Official website: https://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/more/aboutthenon-cooperativecountriesandterritoriesncctinitiative.html?hf=10&b=0&s=desc(fatf_releasedate)

^[56] Russia has been participating in the FATF since 2003.

^[57] In 2018, Iran did not complete an action plan to eliminate strategic shortcomings. In October 2019, the FATF called on its members and urged all other jurisdictions to take the following actions: strengthening controls for branches and subsidiaries of financial institutions based in Iran; introducing reporting mechanisms and increasing external audit requirements for financial groups in Iran. As of October 21, 2022, the FATF has completely lifted the suspension of countermeasures against Iran and called on its members and all other jurisdictions to use effective countermeasures against Iran.

^[58] FATF High-Risk Jurisdictions subject to a Call for Action – 21 October 2022 // FATF Official website: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2022.html.

^[59] FATF Jurisdictions under Increased Monitoring — June 2022 // FATF Official website: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2022.html.

^[60] FATF-XII Report on Money Laundering Typologies (2000-2001) // FATF, February 1, 2001. P. 12. Official website of the Central Bank of the Russian Federation: http://www.cbr.ru/content/document/file/124319/typ-00-01.pdf .

^[61]Review of the FATF Forty Recommendations (Consultation Paper) May 30, 2002 // Antigua Directorate of Offshore Gaming Official Website: http://www.antiguagaming.gov.ag/Money%20Laundering/FATF%2040%20Review.pdf.

^[62] For example, upon the occurrence of a certain event, the powers of the trustee (trustee) are terminated and automatically transferred to another trustee, the applicable law changes, and the trust property moves to another "safer" jurisdiction.

^[63] FATF — The Forty Recommendations 2003 // FATF Official website: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202003.pdf.

^[64] For example, in such transactions as the purchase and sale of real estate; management of funds, securities or other property of the client; management of bank, savings accounts or securities accounts; accumulation of funds for the purpose of creating, ensuring the functioning or management of companies; creation, ensuring the functioning or management of a legal entity or entity and the purchase and sale of enterprises.

^[65] For example, in situations such as acting as a director or secretary of a company, a partner in a partnership or a similar position in relation to other legal entities; providing a registered office, business address or subscriber, correspondent or administrative address for a company, partnership or other legal entity or entity; acting as a trusteea in a trust or performing an equivalent function for another form of legal entity; acting as a nominee shareholder for another person.

^[66] «The provisions contained in this Guidance, when applied by each country, are subject to professional secrecy and legal professional privilege». — RBA Guidance for Legal Professionals 2008 // Treasury Department Official website: https://home.treasury.gov/system/files/246/RBA-guidance-legal-pros-102008.pdf.

^[67] FATF (2019), Guidance for a Risk-Based Approach for Legal Professionals // FATF, Paris, Official website: www.fatf-gafi.org/publications/documents/Guidance-RBA-legal-professionals.html.

^[68] The Guidance on the Risk-Based Approach to combating Money Laundering and Terrorist Financing, June 2007 // FATF Official website: https://www.fatf-gafi.org/media/fatf/documents/reports/High%20Level%20Principles%20and%20Procedures.pdf ; See also: FATF (2021) Guidance on Risk-Based Supervision // FATF, Paris, Official website: www.fatf-gafi.org/publications/documents/Guidance-RBA-Supervision.html .

^[69] Competent authorities, financial institutions and non-financial organizations should ensure that the measures applied to prevent or reduce the number of cases of money laundering and terrorist financing correspond to the identified risks and allow them to decide how to allocate their own resources most effectively.

^[70] The Review of the Standards – Preparation for the 4th Round of Mutual Evaluation Second public consultation, June 2011 // FATF Official website: https://www.fatf-gafi.org/media/fatf/documents/publicconsultation/Second%20public%20consultation%20document.pdf.

^[71]FATF, Egmont Group of Financial Intelligence Units — Concealment of Beneficial Ownership (2018) // FATF Official website: https://www.fatf-gafi.org/media/fatf/documents/reports/fatf-egmont-concealment-beneficial-ownership.pdf.

^[72] Anti-money laundering and counter-terrorist financing measures — Russian Federation — Mutual Evaluation Report (December 2019) // FATF official website: https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Mutual-Evaluation-Russian-Federation-2019.pdf.

^[73] Participation in an organized criminal group and racketeering; terrorism, including the financing of terrorism; human trafficking and the illegal importation of migrants; sexual exploitation, including the sexual exploitation of children; illicit trafficking in narcotic drugs and psychotropic substances; illegal arms trade; illegal trafficking in stolen and other goods; corruption and bribery; fraud;making banknotes; counterfeiting and counterfeiting of products; environmental crimes; murder, grievous bodily harm; kidnapping, illegal imprisonment and hostage-taking; robbery or theft; smuggling (including in relation to customs and excise duties and taxes); tax crimes (related to direct and indirect taxes); extortionfraud; forgery; piracy; insider trading and market manipulation.

^[74] See: Proshunin M.M. Financial monitoring in the system of countering the legalization of criminal proceeds and the financing of terrorism (Russian and foreign experience): Dissertation for the degree of Doctor of Law: 12.00.14. Moscow, 2010.

^[75]Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (no longer in force) // OJ L 166, 28.6.1991, p. 77–82.

^[76]Directive 2001/97/EC of the European Parliament and of the Council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering (no longer in force) // OJ L 344, 28.12.2001, p. 76–82

^[77]Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (no longer in force) // OJ L 309, 25.11.2005, p. 15–36

^[78]Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC // OJ L 141, 5.6.2015, p. 73–117.

^[79] The heir of Daniel Leopold Wildenstein, a French art dealer who headed Wildenstein & Co. in the third generation - one of the most successful and influential companies in the art trade.

^[80] Carvajal D. Trial Offers Rare View of Wildenstein Family and Fortune // The New York Times, September 30, 2016. Official website: https://www.nytimes.com/2016/10/01/arts/design/trial-offers-rare-view-of-wildenstein-family-and-fortune.html.

^[81]Dove J., Lomm F., Blair Smith E., Chittam R., Babcock C., Shilis-Gallego S., Caruana Galizia M., Boland-Rudder H., Diaz-Stryuk E., Garcia Rey M., Reuter D., Chang K., Zalak F., Lee D., Ball D. HSBC held the "dirty" money of dictators and arms dealers // International Consortium of Investigative Journalists (ICIJ), February, 2015. Electronic access: https://www.icij.org/investigations/swiss-leaks/banking-giant-hsbc-sheltered-murky-cash-linked-dictators-and-arms-dealers/.

^[82]Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU // OJ L 156, 19.6.2018, p. 43–74.

^[83] Cross P., Urquhart B.R.J. The Panama Papers: Official Statements from Caribbean Countries // Trusts & Trustees, Volume 23, Issue 1, February 2017, Pages 8–13; Collin M. Illicit Financial Flows: Concepts, Measurement, and Evidence // The World Bank Research Observer, Volume 35, Issue 1, February 2020, Pages 44–86; Prudhoe T., Henoch R. Private foundations and the (limited) impact of the Panama Papers // Trusts & Trustees, Volume 23, Issue 6, July 2017, Pages 610–615; Glover J. Trust registries, discretionary trusts and beneficial owners: a dubious gift from civil lawyers? // Trusts & Trustees, Volume 27, Issue 7, September 2021, Pages 673–685; O’Donovan J., Wagner H., Zeume S. The Value of Offshore Secrets: Evidence from the Panama Papers // The Review of Financial Studies, Volume 32, Issue 11, November 2019, Pages 4117–4155; Bennedsen M., Zeume S. Corporate Tax Havens and Transparency // The Review of Financial Studies, Volume 31, Issue 4, April 2018, Pages 1221–1264.

^[84] Loi ¹ 2011-900 du 29 juillet 2011 de finances rectificative pour 2011 // JOFR ¹ 0175 du 30 juillet 2011.

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