Financial intelligence, Tax, Law enforcement and Customs practitioners of Azerbaijan explored  specific ways of identifying and preventing money laundering linked to tax evasion, in a dedicated workshop on this subject. The workshop, requested by the Azerbaijani authorities in order to obtain deeper insights in this particular area, helped participants better grasp the fundamental nexus between tax evasion and money laundering and understand how to effectively fight against both tax fraud and the laundering of its proceeds. 

The workshop covered a wide spectrum of topics, inter alia, international standards and good practices applicable to money laundering related to tax crimes and legal challenges in this area, the assessment of money laundering threats related to tax crimes, tax evasion schemes and typologies, types of tax abuses, transparency of beneficial ownership for tax subjects, or tax-related issues concerning legal entities and legal arrangements. 

Due to the inherently hidden nature of tax crimes, the delegates were encouraged not only to assess the known threats, but also the perceived tax crimes threats. The international Council of Europe’s expertise provided at the workshop allowed to highlight best practices which the Financial Intelligence Unit, Tax authorities, Law enforcement agencies, supervisors and other competent authorities can employ for the improvement of the detection, reporting and analysis of these crimes. International best practices on red flag indicators and suspicious transaction reporting were also covered during the workshop. 

The Azerbaijani delegates were immersed in the simulated investigation of diverse criminal cases requiring the identification of criminal offences committed, taking into account the national legislation. Through practical exercises, they were shown and explained which specific acts and transactions constitute a tax crime and which may be considered as money laundering.  

It was pointed out during the workshop that the results of national money laundering risk assessments of many jurisdictions, including Azerbaijan, have established that corruption and tax fraud are assessed as high or medium-high threats for money laundering. In this context, it is particularly significant to support national authorities in enhancing their capacities to better detect money laundering from serious tax crimes, and to effectively fight against such crimes.

The workshop also allowed to demonstrate how important domestic and international cooperation is, and the active role competent authorities can play, in coordination, at national and international levels, to efficiently respond to the laundering of proceeds of tax crimes, which jeopardise the use of public funds for the benefit of society.  

This activity was organised within the framework of the project “Strengthening anti-money laundering and asset recovery in Azerbaijan”, funded by the European Union and the Council of Europe and implemented by the Council of Europe in their Partnership for Good Governance II.