Professional enablers’ services – new developments

April 12, 2021 / Knowledge Centre

Don’t worry, be happy – you are not using any professional enablers’ services to minimize taxes or hide beneficiaries, aren’t you…?

A report called: «Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes» was published by the Organization for Economic Co-operation and Development (OECD) on the 25th of February 2021 . Anti-Money-Laundering (AML) & Know-Your-Client (KYC) policies were introduced a long time ago. Year by year they become stricter & stricter for almost all financial professionals. At first sight it seems that there is nothing fundamentally new, or is there?

The authors of the report were quite ingenious and introduced a new term – «professional enabler». Professional enablers’ services contribute to the tax crimes of their clients. This term was introduced in order to exactly define and group the representatives of different professional sectors based on the principle of such criminal assistance. The OECD currently creates a single database of such companies, persons as well as their clients.

What are professional enablers?

Among the professional enablers’ services there are services that, until now, were considered as quite normal practice for conducting international business. Among them activities such as: shared legal addresses, fiduciary managers and nominee directors. Lawyers, registration agents, auditors , accountants, consultants and fiduciary managers all can provide Professional enablers’ services. Clients of such «helpers» might face very unpleasant financial (and, probably, not only financial) consequences from such cooperation.

For now it is only recommendation, but as practice shows, in 2-3 years’ time it may become a legislative initiative and by then, again based on practice, it will be too late to change the structure of your business and investment principles. If you have ever used, or are still using, the services of such professional enablers, who have constructed a complex, offshore multi-level structure for holding and managing your assets (with nominee directors, etc.), it is high time to review such cooperation.

Any alternatives?

For asset management purposes we still recommend clients to use an open architecture “Personal Portfolio Bond“ structure. Well-known insurance companies provide a wide range of such products. They can ensure the safety of your assets, efficient management, full confidentiality, easy inheritance and 100% protection from third-party claims. And more importantly – such products don’t irritate neither financial regulators nor tax authorities.

Feel free to contact us and arrange a meeting with Shoreline’s tax and finance compliance consultant.