The role of financial monitoring in combating tax evasion

Financial monitoring is aimed at identifying suspicious transactions related to money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. Tax evasion falls within the scope of monitoring as a predicate crime to money laundering. Furthermore, international recommendations emphasize the necessity of combining the efforts of competent authorities, including tax authorities, and sharing tax information. At the same time, international recommendations are implemented in different countries taking into account the institutional characteristics of the anti-money laundering system. This article examines the institutional foundations of financial monitoring and tax administration in the Russian Federation. The subject of the research encompasses the theoretical and applied aspects of countering tax evasion as a threat to the legalization of income obtained through criminal means. The study was conducted using general scientific methods and economic analysis. An analysis of the dynamics and structure of suspicious transactions for the transfer of income abroad from 2015 to 2024 was carried out based on data from the Central Bank of Russia. The tasks of financial intelligence units and tax authorities were compared. The informational basis consists of international recommendations, laws, and legal acts of the Russian Federation, as well as methodological recommendations from the Central Bank of Russia. The article presents a brief overview of international recommendations and Russian legislation concerning monitoring in the tax sphere. Special attention is paid to the problems of identifying beneficial owners. Suggestions for improving the process of identification have been developed for organizations, entities of primary monitoring, and government agencies. The insufficient level of interaction among competent authorities demonstrates the identified inconsistency in the criteria used to assess tax factors during transaction monitoring and the criteria for evaluating tax risks. The role of financial monitoring is manifested in a significant reduction in the volume of transactions for transferring income abroad, which are traditionally used for tax evasion. Elements of scientific novelty include the author's conclusions about the tasks of financial monitoring, the resolution of which contributes to counteracting tax evasion. In addressing and resolving these tasks, it is important to more specifically delineate the powers among competent authorities to eliminate the duplication of functions. A key factor in enhancing the role of financial monitoring in the fight against tax evasion is the expansion of inter-agency cooperation and international collaboration among competent authorities.

counteracting money laundering, tax evasion, financial monitoring, suspicious transaction, beneficial owner, financial intelligence unit, tax authority, financial investigation, interagency cooperation, international cooperation