Financial crime

Prevention of the Facilitation of Tax Evasion Policy

Reasonable prevention procedures addressing the corporate criminal offences under the Criminal Finances Act 2017.

Document reference: FGL-LEG-12
Version date: 1 July 2026
Applies to: Fratres Limited

1.Interpretation and definitions

In this Policy the following capitalised terms bear the meanings given to them below. Terms used in the Criminal Finances Act 2017 and not otherwise defined here bear the meanings given to them in that Act.

Company: Fratres Limited, a private company limited by shares incorporated and registered in England and Wales, together with any subsidiary undertaking of it within the meaning of section 1162 of the Companies Act 2006.
Policy: This Prevention of the Facilitation of Tax Evasion Policy, as amended from time to time, together with any procedure, control, register or form issued under it.
CFA 2017: The Criminal Finances Act 2017, and in particular Part 3 of that Act, which creates the Corporate Offences.
Corporate Offences: The offences of failure to prevent facilitation of UK tax evasion offences under section 45 of the CFA 2017 and failure to prevent facilitation of foreign tax evasion offences under section 46 of the CFA 2017.
Tax Evasion: The deliberate and dishonest non-payment, under-payment or evasion of a tax that is legally due, or the deliberate and dishonest obtaining of a repayment, credit, relief or allowance to which there is no entitlement. Tax Evasion is a criminal offence. It is to be distinguished from lawful arrangement of affairs, which is not, and from Tax Avoidance, which is addressed separately in clause 7.
Tax Evasion Facilitation: Being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of a tax by another person; or aiding, abetting, counselling or procuring the commission by another person of an offence of Tax Evasion; or being involved art and part in the commission of such an offence under the law of Scotland. Facilitation must be deliberate and dishonest; conduct that is merely negligent, careless or inadvertent does not amount to Tax Evasion Facilitation, but is nonetheless a breach of this Policy.
UK Tax Evasion Offence: An offence of cheating the public revenue, or an offence under the law of any part of the United Kingdom consisting of being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of a tax imposed under the law of any part of the United Kingdom.
Foreign Tax Evasion Offence: Conduct amounting to an offence under the law of a country outside the United Kingdom that relates to a breach of a duty concerning a tax imposed under the law of that country, and that would, if committed in the United Kingdom in relation to a United Kingdom tax, amount to a UK Tax Evasion Offence.
Associated Person: A person who performs services for or on behalf of the Company, being an employee acting in the capacity of an employee, an agent (other than an employee) acting in the capacity of agent, or any other person who performs services for or on behalf of the Company and who is acting in the capacity of a person performing such services. The concept is defined in clause 5 and is to be read as broadly as section 44 of the CFA 2017 requires.
Personnel: The directors and officers of the Company and every employee, worker, secondee, consultant and contractor engaged by it, whether engaged in the United Kingdom, in Bangladesh or elsewhere.
Intermediary: Any agent, introducer, finder, local representative, sponsor, joint venture partner, sub-contractor, professional adviser, corporate service provider or other third party engaged by or acting for the Company in connection with a Mandate.
Client: Any person, entity or governmental body for whom or for which the Company performs advisory, facilitation or related services, and any person that has instructed the Company or on whose behalf the Company has been instructed.
Mandate: An engagement accepted by the Company to provide advisory, investment facilitation, government relations, regulatory engagement or partnership development services, and every matter, transaction or project undertaken under that engagement.
Prevention Procedures: The procedures maintained by the Company that are designed to prevent an Associated Person, acting in that capacity, from committing an act of Tax Evasion Facilitation, comprising this Policy and the controls, records, training, diligence and monitoring arrangements issued under it.
HMRC Guidance: The guidance published by HM Revenue & Customs on behalf of the Chancellor of the Exchequer under section 47 of the CFA 2017 about procedures that relevant bodies can put in place to prevent persons acting in the capacity of an associated person from committing tax evasion facilitation offences.
Responsible Officer: The officer of the Company to whom the Board has assigned day to day responsibility for financial crime compliance, including the operation of this Policy, and who reports directly to the Board on it. The Responsible Officer may be reached through the enquiry form at fratresgroup.com/contact.
Board: The board of directors of the Company for the time being, acting collectively.
Reportable Concern: Any knowledge, suspicion or reasonable grounds for suspicion that an act of Tax Evasion or Tax Evasion Facilitation has occurred, is occurring or may occur, whether or not it involves the Company, and whether or not it is capable of being proved.
Business Day: A day other than a Saturday, Sunday or public holiday in England and Wales.

1.1

Headings are for convenience only and do not affect interpretation. A reference to a statute or statutory provision is a reference to it as amended, extended, consolidated or re-enacted from time to time, and includes subordinate legislation made under it.

1.2

The words “including”, “includes” and “in particular” are to be read without limitation. The singular includes the plural and the plural the singular.

1.3

A reference to a “tax” includes any tax, duty, levy, contribution or impost of any kind imposed by or on behalf of any government or public authority in any jurisdiction, together with any related interest, penalty or surcharge.

2.Purpose, scope and application

2.1

The purpose of this Policy is to set out the Prevention Procedures that the Company maintains in order to prevent Associated Persons from criminally facilitating Tax Evasion, and to record the standard of conduct that the Company requires of everyone who acts for it or on its behalf.

2.2

This Policy is the Company’s statement of its Prevention Procedures for the purposes of section 45(2) and section 46(4) of the CFA 2017. It is drafted by reference to the HMRC Guidance and to the six guiding principles set out in that guidance, which are addressed in clause 8.

2.3

This Policy applies to all Personnel at every level and in every location, and to every Associated Person. It applies to conduct occurring in the United Kingdom, in Bangladesh and in any other jurisdiction in which the Company or an Associated Person acts.

2.4

The Company carries on business in the United Kingdom and is incorporated under the law of England and Wales. It therefore has the United Kingdom nexus required by section 46(2) of the CFA 2017, and is within the scope of both Corporate Offences in respect of conduct anywhere in the world.

2.5

The obligations in this Policy are additional to, and do not displace, any obligation owed by Personnel or by an Associated Person under general law, under a contract of employment or engagement, under a professional code, or under the law of any jurisdiction in which that person operates. Where a local requirement is more demanding than this Policy, the more demanding requirement applies.

2.6

This Policy is to be read with the Anti-Money Laundering and Counter-Terrorist Financing Policy, the Client Due Diligence and Know Your Customer Standard, the Anti-Bribery and Anti-Corruption Policy, the Sanctions and Export Controls Policy, the Conflicts of Interest Policy and the Whistleblowing and Speak-Up Policy. All are published in the Company’s legal register.

2.7

This Policy does not form part of any contract of employment, and the Company may amend it at any time. Compliance with it is nonetheless a condition of employment and of every engagement under which a person performs services for or on behalf of the Company.

The position in short

The Company does not evade tax, does not assist any person to evade tax, and does not work with those who do. A person who is asked, by a Client, a counterparty, an Intermediary or a colleague, to do anything that would assist another person to evade tax must refuse and must report the request. Refusal will never be held against that person.

3.Statutory framework

3.1

Part 3 of the CFA 2017 creates two corporate criminal offences. Under section 45, a relevant body is guilty of an offence if a person associated with it commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with that body. Under section 46, a relevant body is guilty of an offence if a person associated with it commits a foreign tax evasion facilitation offence in the same circumstances.

3.2

A “relevant body” for these purposes is a body corporate or a partnership, wherever incorporated or formed. The Company is a relevant body.

3.3

The section 46 offence applies only where the relevant body has a United Kingdom nexus. That nexus exists where the body is incorporated or formed under the law of any part of the United Kingdom, where it carries on business or part of a business in the United Kingdom, or where any conduct forming part of the facilitation offence takes place in the United Kingdom. The Company satisfies the first two of those conditions.

3.4

The section 46 offence also requires dual criminality. The taxpayer’s conduct must be an offence under the law of the foreign country and must be conduct that would amount to a UK Tax Evasion Offence had it related to a United Kingdom tax. The facilitator’s conduct must likewise be an offence under the law of that foreign country and must be conduct that would amount to a UK tax evasion facilitation offence had the underlying evasion related to a United Kingdom tax.

3.5

The Corporate Offences are offences of strict liability so far as the relevant body is concerned. It is not necessary for the prosecution to prove that the Board, senior management or any directing mind knew of, consented to, connived in or was negligent in relation to the facilitation. The only defence available is the one described in clause 6.

3.6

On conviction, a relevant body is liable to an unlimited fine. A conviction may also give rise to ancillary consequences, including confiscation proceedings under Part 2 of the Proceeds of Crime Act 2002, a serious crime prevention order under Part 1 of the Serious Crime Act 2007, exclusion from public procurement processes in the United Kingdom and elsewhere, and the loss of licences, registrations and access to finance.

3.7

The underlying evasion offences to which the Corporate Offences attach include the common law offence of cheating the public revenue, the offence of fraudulent evasion of income tax under section 144 of the Finance Act 2000, the offence of fraudulent evasion of value added tax under section 72 of the Value Added Tax Act 1994, and the offence of fraudulent evasion of duty under section 170 of the Customs and Excise Management Act 1979.

3.8

Conduct caught by this Policy will frequently also engage other legislation. In particular:

(a)the Proceeds of Crime Act 2002, under which the proceeds of Tax Evasion are criminal property and dealing with them may constitute an offence under sections 327 to 329;
(b)the Fraud Act 2006, including the offences of fraud by false representation and fraud by failing to disclose information;
(c)the Bribery Act 2010, where a payment or advantage is offered to a revenue official or to any other person;
(d)the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, where the Company or a counterparty is within the regulated sector;
(e)Schedule 16 to the Finance (No. 2) Act 2017, which imposes penalties on those who enable abusive tax arrangements that are later defeated; and
(f)the Sanctions and Anti-Money Laundering Act 2018 and the Terrorism Act 2000, where the conduct also engages financial sanctions or terrorist financing.

3.9

In Bangladesh, the relevant revenue authority is the National Board of Revenue. Evasion of a tax administered by that authority, and the criminal facilitation of such evasion, may found liability under section 46 of the CFA 2017 where the dual criminality test in clause 3.4 is satisfied. The Company treats Bangladeshi tax obligations as having the same standing under this Policy as United Kingdom tax obligations.

3.10

Directors are separately subject to the duty to promote the success of the Company under section 172 of the Companies Act 2006 and the duty to exercise reasonable care, skill and diligence under section 174 of that Act. The Board treats the maintenance of effective Prevention Procedures as an element of both duties.

4.The three stage test

4.1

Liability under either Corporate Offence arises only where three stages are made out. Each stage must be proved to the criminal standard.

4.2

Stage one — criminal tax evasion by a taxpayer. A taxpayer, whether an individual or an entity, must have committed a criminal offence of evading tax under United Kingdom law or under the law of a foreign country. Deliberate and dishonest conduct is required. Lawful arrangement of affairs, error, and disputed but honestly held technical positions do not satisfy this stage.

4.3

Stage two — criminal facilitation by an Associated Person. A person associated with the Company, acting in that capacity, must have deliberately and dishonestly taken steps with a view to, or been knowingly concerned in, that evasion, or must have aided, abetted, counselled or procured it. The Associated Person must know that the taxpayer’s conduct amounts to evasion. Inadvertent or negligent assistance does not satisfy this stage.

4.4

Stage three — failure by the Company to prevent. The Company must have failed to prevent the Associated Person from committing the act described at stage two. This stage is made out by the fact of the facilitation, subject only to the defence in clause 6.

4.5

A prosecution or conviction of the taxpayer at stage one, or of the Associated Person at stage two, is not a precondition of liability at stage three. It is sufficient that the conduct at stages one and two occurred and was criminal.

4.6

It follows that the Company may be prosecuted for the criminal act of a person over whom it has limited practical control, in a jurisdiction in which it has no permanent presence, without any officer of the Company having known anything about it. That is why this Policy is drafted as an operating requirement rather than as a statement of intent, and why the controls in clauses 9 to 14 are mandatory.

The practical consequence of the three stage test is that the Company’s exposure is created by other people’s conduct. The only thing within the Company’s control is stage three. Everything in this Policy is directed at that stage.

5.Associated Persons

5.1

Section 44 of the CFA 2017 defines a person associated with a relevant body as a person, whether an individual or an incorporated or unincorporated body, who performs services for or on behalf of that body. The definition is deliberately wide and captures far more than the Company’s own employees.

5.2

A person falls within the definition if that person is:

(a)an employee of the Company acting in the capacity of an employee;
(b)an agent of the Company, other than an employee, acting in the capacity of an agent; or
(c)any other person who performs services for or on behalf of the Company and who is acting in the capacity of a person performing such services.

5.3

Whether a person is performing services for or on behalf of the Company, and the capacity in which that person acts, is determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between that person and the Company. A label applied in a contract does not determine the question.

5.4

The Company therefore treats each of the following as capable of being an Associated Person, and applies this Policy accordingly:

directors, officers, employees, workers and secondees, whether permanent, fixed term or casual;
consultants, contractors and sub-contractors, and their own personnel where they are deployed on a Mandate;
agents, introducers, finders and local representatives, including those remunerated only on success;
joint venture partners, consortium members and special purpose vehicles, where and to the extent that they perform services for or on behalf of the Company;
professional advisers, including lawyers, accountants, tax advisers, corporate service providers and company formation agents, where they are engaged by the Company or act on its behalf;
suppliers and service providers who perform a service that forms part of the Company’s own delivery to a Client; and
any person who is held out to a third party as acting for the Company, whether or not a contract exists.

5.5

A person is not an Associated Person merely because that person supplies goods or services to the Company for the Company’s own consumption, or merely because that person is a Client. A Client may nonetheless become an Associated Person where the Client also performs services for or on behalf of the Company, and the Company assesses that possibility whenever a Mandate involves reciprocal roles.

5.6

Conduct falls within stage two only where the Associated Person acts in the capacity of a person associated with the Company. An employee who facilitates the evasion of tax in a purely personal capacity, and without reference to the Company, does not thereby expose the Company to the Corporate Offences. The Company does not, however, rely on that distinction operationally, because the boundary is fact-sensitive and is determined after the event.

5.7

The Company maintains a register of Associated Persons engaged on each Mandate. The register records the identity of the Associated Person, the nature and scope of the services, the basis and rate of remuneration, the jurisdictions in which the services are performed, the date and outcome of due diligence, and the date on which the contractual terms required by clause 12 were accepted.

5.8

No Associated Person may be engaged, instructed or paid on a Mandate before that person has been entered on the register and the due diligence required by clause 12 has been completed and approved.

6.The reasonable prevention procedures defence

6.1

Section 45(2) and section 46(4) of the CFA 2017 provide a single defence. It is a defence for a relevant body to prove either that it had in place such prevention procedures as it was reasonable in all the circumstances to expect it to have in place, or that it was not reasonable in all the circumstances to expect it to have any prevention procedures in place.

6.2

The Company does not rely, and will not seek to rely, on the second limb of that defence. Given the jurisdictions and sectors in which the Company operates, it would not be reasonable to expect the Company to have no prevention procedures.

6.3

The burden of establishing the defence rests on the relevant body, and the standard is the balance of probabilities. The defence is established by evidence, not by assertion. Procedures that exist on paper but are not implemented, understood, monitored or enforced will not establish it.

6.4

For that reason, the Company treats the creation and retention of records as an operative obligation of this Policy rather than an administrative one. Every risk assessment, due diligence file, training record, escalation, decision to decline or terminate, and review of this Policy is documented and retained in accordance with the Data Retention and Records Management Policy.

6.5

Prevention Procedures are procedures designed to prevent persons acting in the capacity of an Associated Person from committing an act of Tax Evasion Facilitation. They are not required to be, and cannot be, a guarantee. What is reasonable is judged by reference to the Company’s size, the nature and complexity of its business, the jurisdictions in which it operates and the risks it faces, assessed at the time of the conduct in question.

6.6

The Company therefore keeps its Prevention Procedures proportionate to assessed risk and revises them when the risk profile changes, rather than adopting a fixed set of controls. Rapid implementation of an improvement identified by a risk assessment is itself an element of reasonableness.

7.Prohibited conduct

7.1

No Associated Person shall, in the course of performing services for or on behalf of the Company, engage in any conduct that constitutes, contributes to, conceals or is intended to enable Tax Evasion or Tax Evasion Facilitation by any person.

7.2

Without limiting clause 7.1, the following conduct is prohibited absolutely:

(a)assisting, advising or encouraging any person to conceal income, gains, assets, beneficial ownership or a taxable presence from any revenue authority;
(b)creating, procuring, signing, backdating or issuing any invoice, contract, receipt, board minute, valuation, certificate of residence or other document that does not accurately record the transaction or the position it purports to record;
(c)issuing or accepting an invoice that misdescribes the services provided, the party to whom they were provided, the place at which they were provided, or the consideration paid;
(d)structuring, splitting, re-routing or re-characterising a payment, or directing a payment to a jurisdiction or account unconnected with the underlying transaction, in order to obscure its source, destination, purpose or taxability;
(e)establishing, recommending or administering an entity, trust, nominee arrangement or account for the purpose of concealing beneficial ownership from a revenue authority;
(f)making or accepting a payment in cash, in kind, or through an unrecorded channel, where the purpose or effect is to remove the payment from the tax records of any party;
(g)engaging a worker through an arrangement designed to misrepresent that worker’s employment status or to evade payroll, social security or withholding obligations in any jurisdiction;
(h)offering, promising, giving, requesting or accepting any payment or advantage to or from a revenue official in order to secure a favourable treatment, a reduced assessment, a suppressed record or the destruction of information;
(i)destroying, altering or withholding a document that is or may become relevant to a tax enquiry, assessment, investigation or proceeding; and
(j)ignoring, failing to escalate or deliberately avoiding knowledge of any circumstance that would, if examined, disclose Tax Evasion by another person.

7.3

Deliberately refraining from making enquiries in order to avoid acquiring knowledge is treated by this Policy as equivalent to knowledge. Personnel may not resolve a concern by declining to ask the question.

7.4

Tax Avoidance is not the subject of this Policy and is not a criminal offence. The Company nonetheless does not design, market, promote, implement or introduce a Client to arrangements whose main purpose, or one of whose main purposes, is to obtain a tax advantage in a manner contrary to the intention of the legislation, and it is alert to the enabler penalty regime in Schedule 16 to the Finance (No. 2) Act 2017 and to the general anti-abuse rule in Part 5 of the Finance Act 2013.

7.5

The Company does not give tax advice. Where a Mandate requires a tax opinion, a structuring analysis or a filing position, the Client shall be directed to appropriately qualified and independently instructed tax advisers, and the Company shall record that it has done so.

7.6

The Company meets its own tax obligations in every jurisdiction in which it is liable, files accurate and timely returns, keeps adequate accounting records in accordance with section 386 of the Companies Act 2006, and does not use the corporate structure, entity location or contracting arrangements of a Mandate to obtain a tax advantage for itself that it could not properly defend to the relevant authority.

7.7

A commercial consequence, however serious, is never a justification for breaching this Policy. The Company will accept the loss of a Mandate, a fee, an Intermediary relationship or a market opportunity rather than permit conduct prohibited by this clause. No person acting for the Company has authority to waive this clause, and no instruction to the contrary, from whatever source, is to be followed.

8.The six guiding principles

8.1

The HMRC Guidance identifies six guiding principles that inform whether procedures are reasonable. They are risk assessment, proportionality of risk-based prevention procedures, top level commitment, due diligence, communication including training, and monitoring and review. The Company’s Prevention Procedures are built on those six principles, and this clause records how each is given effect.

8.2

Principle one — risk assessment. The Company assesses, documents and keeps under review the nature and extent of its exposure to the risk that an Associated Person will criminally facilitate Tax Evasion. The assessment is conducted before controls are designed, so that controls answer identified risks rather than assumed ones. Clause 9 sets out the methodology and clause 10 the risk areas presently assessed as material.

8.3

Principle two — proportionality of risk-based prevention procedures. Controls are calibrated to the level of risk, to the Company’s size and to the nature and complexity of the relevant Mandate. Higher risk relationships attract enhanced diligence, senior approval, additional contractual protection and closer monitoring; lower risk relationships attract standard controls. Proportionality is a reason to concentrate effort, never a reason to omit a control where risk is present.

8.4

Principle three — top level commitment. The Board owns this Policy, approves it, and is accountable for its operation. The Board has appointed the Responsible Officer, has given that officer direct and unrestricted access to the Board, and has resolved that the Responsible Officer may halt, suspend or decline any Mandate, payment or engagement on the ground of tax evasion facilitation risk without needing commercial approval. The Board communicates its commitment to Personnel and to Associated Persons in clear terms, and does not reward outcomes achieved in breach of this Policy.

8.5

Principle four — due diligence. The Company applies proportionate, risk-based due diligence to Associated Persons and to counterparties before engagement and during the relationship. Diligence is directed at the specific question raised by the CFA 2017: whether this person, performing these services, in these jurisdictions, on these payment terms, presents a risk of criminally facilitating the evasion of tax. Clause 12 sets out the standard.

8.6

Principle five — communication, including training. This Policy is published in full in the Company’s legal register and is provided to every Associated Person on engagement. Personnel receive training on the Corporate Offences, the three stage test, the warning indicators in clause 11 and the reporting routes in clause 13 on induction and at least annually thereafter, with additional role-specific training for those responsible for Mandate origination, Intermediary engagement, invoicing and payments. Training is recorded, completion is monitored, and non-completion is escalated to the Responsible Officer.

8.7

Principle six — monitoring and review. The Company monitors the operation of its Prevention Procedures, tests them against actual practice, and reviews them at least annually and additionally on the occurrence of any of the events listed in clause 16.2. Findings, remedial actions and their completion dates are recorded and reported to the Board.

Why the principles are stated operationally

The six principles are not a checklist to be recited after an incident. They are the criteria against which a court will judge whether the Company’s procedures were reasonable at the moment the facilitation occurred. Each is therefore expressed here as a standing obligation with an owner, a record and a review cycle.

9.Risk assessment in practice

9.1

The Responsible Officer maintains a written tax evasion facilitation risk assessment covering the whole of the Company’s business. It is approved by the Board, reviewed at least annually, and revised whenever the Company enters a new sector, jurisdiction, service line or category of Intermediary relationship.

9.2

The risk assessment is conducted by reference to the following factors, considered together rather than in isolation:

(a)country risk, including the assessed effectiveness of tax administration and enforcement in each jurisdiction in which the Company or an Associated Person operates, and the prevalence of cash and informal settlement in that market;
(b)sector risk, including the presence of large infrastructure procurement, land acquisition, extractive licensing, construction sub-contracting and cross-border equipment supply within the Company’s sectors;
(c)transaction risk, including the use of holding structures, intermediate jurisdictions, offshore accounts, nominee shareholders and rapid changes to contracting parties;
(d)product and service risk, including the extent to which a Mandate involves the Company in the introduction of counterparties, the structuring of payment flows, or the transmission of documents relied upon by third parties;
(e)business opportunity risk, including mandates won on tight timescales, mandates with unusually high margins, and mandates in which the Company is asked to depart from its standard process; and
(f)business partnership risk, including the use of Intermediaries, joint ventures, local representatives and success-based remuneration.

9.3

Each identified risk is assessed for likelihood and impact, allocated an owner, and matched to a specific control. The assessment records the residual risk accepted by the Board after the control is applied.

9.4

The risk assessment is informed by, but not confined to, the concerns raised through the routes in clause 13, the outcomes of due diligence under clause 12, the findings of monitoring under clause 8.7, and published guidance and enforcement activity from HM Revenue & Customs and other authorities.

9.5

A Mandate-level assessment is completed before any Mandate is accepted. It identifies the Associated Persons expected to be engaged, the jurisdictions involved, the payment flows and the specific points at which the Company or an Associated Person could be used to facilitate the evasion of tax. Where the Mandate-level assessment identifies a risk that cannot be controlled, the Mandate is declined.

9.6

A decision to decline or to withdraw from a Mandate on the ground of tax evasion facilitation risk is recorded with its reasons, and is reported to the Board at its next meeting.

10.Assessed risk areas

10.1

The Company has assessed the following as the areas of its business in which the risk of tax evasion facilitation is most acute. Each carries the specific controls set out below, in addition to the general controls in this Policy.

10.2

Intermediaries. The engagement of agents, introducers, finders, local representatives and sponsors is the Company’s single largest area of exposure, because an Intermediary acts in the Company’s name, is often remunerated by reference to outcome, and frequently operates where the Company has no permanent presence. No Intermediary may be engaged without a written contract containing the terms required by clause 12.6, completed due diligence approved by the Responsible Officer, a defined and documented scope of services, and a rationale recording why that Intermediary is needed and why the remuneration is commercially justified by the services to be performed.

10.3

Fee arrangements. The manner in which the Company is paid, and the manner in which it pays others, can be used to disguise the character of a payment. The following requirements apply without exception:

(a)every fee, commission and reimbursement is set out in a written agreement executed before the work is performed, and is invoiced against that agreement;
(b)every invoice accurately describes the services performed, the period covered, the entity that performed them and the entity liable to pay;
(c)payment is made only to the contracting counterparty, only to a bank account in that counterparty’s name, and only in the jurisdiction in which that counterparty is established or in which the services were performed;
(d)payment to a third party, to a numbered or nominee account, or to an account in a jurisdiction unconnected with the counterparty or the services, is prohibited;
(e)requests to split an invoice, to re-describe services, to re-date a document, to invoice a different entity from the one instructed, or to omit value added tax or an equivalent indirect tax where it is properly chargeable, are prohibited and must be reported under clause 13;
(f)cash payment and payment in kind are prohibited, save for routine expense reimbursement supported by receipts and recorded in the accounting records; and
(g)success fees, contingent fees and introduction fees are permitted only where approved in advance by the Responsible Officer, documented as to the services that earn them, and paid against an invoice that accurately describes those services.

10.4

Cross-border structuring. The Company’s work regularly involves capital moving between jurisdictions and entities established for the purpose of holding an investment. Where the Company is involved in, or is asked to comment on, the selection of a holding jurisdiction, the identity of a contracting entity, the location of a bank account or the routing of a payment, it shall satisfy itself that the arrangement has a genuine commercial rationale independent of its tax effect, that beneficial ownership is disclosed to the authorities to which disclosure is owed, and that the Client is separately and independently advised on tax. The Company shall not participate in an arrangement whose purpose or effect is to place income, gains, assets or a taxable presence beyond the knowledge of a revenue authority entitled to it, including through arrangements designed to defeat the international exchange of information under the Common Reporting Standard.

10.5

Payroll, contracting and employment status. Where the Company engages individuals through personal service companies, umbrella arrangements, local labour providers or self-employed contracts, it shall establish and record the correct employment status in each relevant jurisdiction and shall ensure that payroll taxes, social security contributions and withholding obligations are properly operated. Arrangements adopted for the purpose of misrepresenting employment status are prohibited.

10.6

Government-facing work and public procurement. Engagement with ministries, authorities and regulators is conducted transparently and in accordance with the Anti-Bribery and Anti-Corruption Policy. No payment, advantage or accommodation may be offered to any official in connection with an assessment, a customs valuation, a duty classification, a licence fee or any other revenue matter. Any request for such a payment must be refused and reported immediately.

10.7

Land, licensing and asset valuation. In land acquisition, mineral licensing, concession award and asset transfer, the understatement of consideration in order to reduce stamp, transfer, registration or capital taxes is a recognised risk. The Company shall not participate in, advise on, witness or document any transaction in which the recorded consideration differs from the consideration actually passing, and shall report any proposal to do so under clause 13.

10.8

Joint ventures and consortium arrangements. Where the Company participates in a joint venture, it shall satisfy itself before committing that the venture has adopted equivalent prevention procedures, shall seek information rights sufficient to verify that they operate, and shall record the basis on which it is satisfied. Where equivalent procedures cannot be secured, the Company shall limit its role, ring-fence its involvement, or decline to participate.

11.Warning indicators

11.1

The following are warning indicators. The presence of an indicator does not establish that Tax Evasion or Tax Evasion Facilitation is occurring, and many have innocent explanations. Each nonetheless requires the person who observes it to stop, to obtain an explanation, and to report the matter under clause 13 if the explanation is not satisfactory and documented.

a request to alter, backdate, split, re-describe or reissue an invoice, contract or receipt;
a request to direct payment to a person other than the contracting counterparty, or to an account in an unrelated jurisdiction, or to a numbered or nominee account;
a counterparty’s reluctance or refusal to identify its beneficial owners, or an ownership chain whose complexity is not explained by any commercial purpose;
the introduction of an entity into a structure that performs no discernible function and has no employees, premises or activity;
a proposal to record a consideration, valuation or quantity that differs from the amount actually passing or the goods actually supplied;
a request that the Company or an Associated Person confirm a state of affairs it has not verified, or issue a document to be relied upon by a revenue authority;
remuneration proposed for an Intermediary that is disproportionate to the services to be performed, or is payable regardless of whether services are performed;
a counterparty’s insistence on cash settlement, on payment in kind, or on the avoidance of banking channels;
pressure to complete a transaction before diligence can be finished, coupled with a stated reason connected to a filing deadline, a year end or an assessment;
a request that a communication be kept off the record, deleted, moved to a personal channel or excluded from the Mandate file;
an unexplained change in the identity of the contracting entity, the invoicing entity or the paying entity shortly before completion;
a counterparty that is the subject of a tax investigation, assessment, enquiry or dispute that it has not disclosed;
an assertion that a payment or arrangement is “how business is done here”, or that a local official has approved a departure from the ordinary rules; and
an instruction not to ask a particular question, or the discouragement of enquiry into a particular part of a structure.

11.2

A person who identifies a warning indicator shall not seek to resolve it alone, shall not accept an oral assurance as sufficient, and shall not proceed with the transaction, payment or document concerned until the Responsible Officer has recorded a decision.

11.3

Where a warning indicator concerns a payment, the payment shall be held. Where it concerns a document, the document shall not be issued, signed or transmitted. Where it concerns an Intermediary, no further instruction shall be given to that Intermediary. In each case the hold remains until it is released in writing by the Responsible Officer.

12.Due diligence and contractual terms

12.1

Due diligence under this Policy is carried out in conjunction with the Client Due Diligence and Know Your Customer Standard and the Anti-Money Laundering and Counter-Terrorist Financing Policy, but is directed at a distinct question and produces a distinct record.

12.2

Standard due diligence on a proposed Associated Person establishes and records:

(a)legal identity, place of incorporation or residence, registered particulars and, for entities, beneficial ownership to natural persons;
(b)the services to be performed, where they will be performed, and by which individuals;
(c)the basis, rate, currency, timing and destination of remuneration, and the commercial justification for it;
(d)tax registration status in each jurisdiction in which the person will act, where the person is required to be registered;
(e)adverse information from public sources concerning tax offences, revenue investigations, financial crime, insolvency or regulatory sanction;
(f)any connection to a public official, a revenue authority or a politically exposed person; and
(g)whether the person has its own prevention procedures, and if so their substance.

12.3

Enhanced due diligence is applied, and approval by the Responsible Officer is required before engagement, where the proposed Associated Person is remunerated on a success or contingent basis, will act in a jurisdiction assessed as higher risk, will handle or direct payments, will interact with a revenue authority on the Company’s behalf, is connected to a public official, or was proposed by the Client rather than selected by the Company.

12.4

Enhanced due diligence includes independent verification of the information provided, examination of the person’s own prevention procedures, enquiry into the source of the person’s standing in the market, and, where proportionate, a documented interview addressing this Policy.

12.5

Due diligence is refreshed at least every two years, and immediately on any change in beneficial ownership, scope of services, remuneration basis or jurisdiction of operation, and on the emergence of adverse information.

12.6

Every contract with an Associated Person shall contain, as a minimum, terms by which that person:

(a)warrants that neither it nor any of its personnel has engaged in, and covenants that neither will engage in, Tax Evasion or Tax Evasion Facilitation;
(b)undertakes to comply with this Policy and with all applicable tax and financial crime law in every jurisdiction in which it acts;
(c)undertakes to maintain its own prevention procedures proportionate to its own risk, and to impose equivalent obligations on any sub-contractor or other person it engages in connection with the services;
(d)undertakes to invoice and be paid only in accordance with clause 10.3, and not to request or accept any departure from it;
(e)undertakes to report to the Company, without delay, any request or circumstance that would engage clause 11, and any investigation, enquiry or proceeding concerning tax to which it becomes subject;
(f)grants the Company rights of audit, inspection and information in respect of records relating to the services, exercisable on reasonable notice and at the Company’s cost;
(g)accepts that breach of any of the foregoing is a material breach entitling the Company to terminate with immediate effect and without compensation, and to withhold sums otherwise due; and
(h)indemnifies the Company against loss arising from that person’s Tax Evasion Facilitation.

12.7

Where a counterparty refuses the terms in clause 12.6, the engagement shall not proceed unless the Responsible Officer has approved an alternative that provides equivalent protection and has recorded the reasons in writing. Commercial inconvenience is not such a reason.

12.8

The Company shall terminate its relationship with any Associated Person who commits, or whom the Company reasonably believes to have committed, an act of Tax Evasion Facilitation, and shall do so irrespective of the stage of the Mandate, subject only to any obligation not to prejudice a law enforcement investigation.

13.Reporting obligations

13.1

Every person subject to this Policy who becomes aware of a Reportable Concern shall report it to the Responsible Officer immediately, and in any event before taking any further step in the matter concerned. The obligation to report is personal, is not discharged by telling a line manager, and is not conditional on the person being certain.

13.2

A report may be made through the enquiry form at fratresgroup.com/contact, marked for the attention of the Responsible Officer, or through any channel described in the Whistleblowing and Speak-Up Policy, including the confidential channel available where the person does not wish to report through the ordinary route. A report is acknowledged within five Business Days.

13.3

A report shall record what was observed, when, by whom, the persons and entities involved, the documents concerned and any action already taken. The person making the report shall preserve all relevant documents and communications and shall not delete, amend or remove anything.

13.4

The person making the report shall not disclose the report, or the fact that a report has been made, to the person whose conduct is concerned or to any other person, except to the Responsible Officer or as the Responsible Officer directs. This restriction protects any subsequent investigation and reflects the prohibition on tipping off in section 333A of the Proceeds of Crime Act 2002 where that section applies.

13.5

On receipt, the Responsible Officer shall record the report in the register of concerns, assess it promptly, impose any hold required by clause 11.3, and determine what further action is required. The Responsible Officer shall report every Reportable Concern to the Board.

13.6

Where the Responsible Officer knows or suspects, or has reasonable grounds to know or suspect, that property constitutes or represents a benefit from criminal conduct, including the proceeds of Tax Evasion, consideration shall be given to whether a suspicious activity report must or should be made to the National Crime Agency under Part 7 of the Proceeds of Crime Act 2002, and whether an authorised disclosure under section 338 of that Act should be made before any further dealing with the property. Where consent is sought, no further dealing shall take place until the statutory notice period has expired or consent has been given.

13.7

Where the matter engages terrorist property, consideration shall be given to the disclosure obligations in Part 3 of the Terrorism Act 2000. Where it engages financial sanctions, a report shall be made to the Office of Financial Sanctions Implementation in accordance with the Sanctions and Export Controls Policy.

13.8

Where the Company concludes that an Associated Person has criminally facilitated Tax Evasion, the Board shall consider promptly, on legal advice, whether to self-report the matter to HM Revenue & Customs. The Company’s starting position is that it will self-report, and the reasons for any decision not to do so shall be recorded by the Board.

13.9

The Company shall co-operate fully with HM Revenue & Customs, the National Crime Agency, the National Board of Revenue and any other competent authority conducting a lawful investigation, and shall not destroy, conceal or alter any document relevant to it.

14.Protection for those who report

14.1

The Company shall not subject any person to dismissal, disciplinary action, demotion, loss of work, withdrawal of a Mandate, exclusion, harassment or any other detriment for refusing to participate in conduct prohibited by this Policy, or for raising a Reportable Concern in good faith.

14.2

That protection applies whether or not the concern proves to be well founded, provided it was raised honestly. It applies equally to Personnel, to Associated Persons and to any other person who raises a concern about the Company’s conduct.

14.3

A worker who makes a qualifying disclosure in accordance with Part IVA of the Employment Rights Act 1996, as inserted by the Public Interest Disclosure Act 1998, has the statutory right not to be subjected to detriment and not to be unfairly dismissed for having done so. Nothing in this Policy, in any contract, or in any settlement or confidentiality agreement operates to prevent, discourage or penalise such a disclosure, and any term purporting to do so is void by operation of section 43J of that Act.

14.4

Retaliation against a person who has raised a concern, or who is believed to have done so, is itself a disciplinary matter and is treated as gross misconduct.

14.5

The identity of a person raising a concern is treated as confidential and is disclosed only where the person consents, where disclosure is required by law or by a competent authority, or where it is unavoidable in order to investigate the concern properly, in which case the person shall be told in advance wherever it is lawful to do so.

14.6

A concern may be raised anonymously. An anonymous concern is investigated so far as the information provided allows, though the Company may be unable to seek clarification or to provide feedback.

14.7

The Company shall not treat a person less favourably by reason of any protected characteristic within the meaning of the Equality Act 2010 in connection with the making, handling or outcome of a report under this Policy.

15.Consequences of breach

15.1

Breach of this Policy by an employee is a disciplinary matter and, depending on its seriousness, may be treated as gross misconduct warranting summary dismissal without notice or payment in lieu of notice.

15.2

Breach by a director or officer shall be reported to the Board and may result in removal from office, in addition to any other consequence.

15.3

Breach by any other Associated Person is a material breach of the relevant contract and entitles the Company to terminate that contract with immediate effect, to withhold or recover sums paid or payable under it, to remove that person from the register maintained under clause 5.7, and to decline any future engagement.

15.4

The Company shall report conduct amounting to a criminal offence to the appropriate authority, and shall co-operate with any resulting investigation or prosecution. Disciplinary action and reporting are not alternatives, and the Company shall not agree to refrain from reporting in exchange for resignation, repayment or settlement.

15.5

An individual who criminally facilitates Tax Evasion commits a criminal offence in a personal capacity and is liable to prosecution, to an unlimited fine and to imprisonment. The Company shall not indemnify any person against a fine, penalty or cost arising from that person’s own criminal conduct, and shall not fund a defence to such a charge save to the extent required by law or by an existing indemnity lawfully granted.

15.6

For the Company, the consequences of a Corporate Offence extend beyond conviction and fine to confiscation, ancillary orders, exclusion from procurement, withdrawal of banking and insurance, loss of Client and government relationships, and reputational damage of a kind this Policy exists to avoid.

15.7

Any breach, whether or not it results in liability, shall be investigated, recorded and analysed for its root cause. The findings shall be reflected in the risk assessment under clause 9 and in the Prevention Procedures, and the corrective action taken shall be recorded together with the date of its completion.

16.Governance, review and status

16.1

This Policy is issued and approved by the Board of the Company, registered in England and Wales. The Board is accountable for it. Day to day responsibility for its operation, including the risk assessment, due diligence approvals, training, monitoring and the register of concerns, rests with the Responsible Officer.

16.2

This Policy is reviewed at least annually and additionally on the occurrence of any of the following: a material change to the CFA 2017 or to the HMRC Guidance; entry into a new jurisdiction, sector or service line; a material change in the Company’s use of Intermediaries; a Reportable Concern that discloses a control weakness; an investigation by any authority; or a finding from monitoring under clause 8.7.

16.3

The version date and document reference shown at the head of this Policy identify the version in force. The version in force at the time of the conduct in question is the version that governs it.

16.4

Records created under this Policy are retained in accordance with the Data Retention and Records Management Policy, and for no shorter period than is necessary to evidence the operation of the Prevention Procedures in any proceedings that may arise.

16.5

Personal data processed in the operation of this Policy, including in due diligence and in the handling of reports, is processed in accordance with the UK GDPR and the Data Protection Act 2018 and as described in the Privacy Policy. Where such data is transferred outside the United Kingdom, the safeguards described in the International Data Transfer Statement apply.

16.6

Questions about this Policy, requests for a copy of it in an alternative format, and requests for confirmation of the Company’s prevention procedures for the purposes of a counterparty’s own diligence, may be made through the enquiry form at fratresgroup.com/contact and will be acknowledged within five Business Days.

16.7

This Policy and any dispute arising out of or in connection with it, whether contractual or non-contractual, is governed by the law of England and Wales and is subject to the exclusive jurisdiction of the courts of England and Wales.

Related policies

This Policy should be read with the Anti-Money Laundering and Counter-Terrorist Financing Policy, the Client Due Diligence and Know Your Customer Standard, the Anti-Bribery and Anti-Corruption Policy and the Sanctions and Export Controls Policy, which together form the Company’s financial crime framework; and with the Whistleblowing and Speak-Up Policy, which sets out the channels through which a concern under clause 13 may be raised. All are published in the legal register.

Related policies

Anti-Money Laundering & Counter-Terrorist Financing PolicyThe firm’s risk-based approach to money laundering and terrorist financing risk, including customer due diligence, monitoring and reporting obligations.FGL-LEG-08 Client Due Diligence & Know Your Customer StandardThe identification, verification and beneficial ownership standards applied before and during any client engagement.FGL-LEG-09 Anti-Bribery & Anti-Corruption PolicyProhibitions, controls and procedures governing bribery, facilitation payments, hospitality, political contributions and third-party intermediaries.FGL-LEG-10 Sanctions & Export Controls PolicyThe firm’s approach to financial sanctions, trade restrictions and export control obligations across the jurisdictions in which it operates.FGL-LEG-11

Full legal register