9. MONEY LAUNDERING, TERRORIST FINANCING AND TAX HAVENS

Published : June 14, 2016  /  Updated : August 12, 2019

9. Money laundering, terrorist financing and tax havens

Please read this Section 9 together with Section 10 Trade Sanctions.

9.1 Money Laundering and Terrorist Financing

We are committed to complying fully with all applicable anti-money laundering and terrorist financing laws throughout the world.

Money laundering is the process through which an individual or organisation seeks to make the proceeds of criminal activity appear legitimate. The term “money laundering” is also sometimes used to refer to the handling of any benefit that arises from acquisitive crimes, such as theft, fraud or tax evasion. Stora Enso strictly prohibits knowingly engaging in transactions that facilitate money laundering and terrorist financing or that otherwise result in the unlawful diversion of assets. We are committed to conducting business only with customers who are involved in legitimate business activities, with funds that are derived from legitimate sources.

Stora Enso’s employees play an integral role in helping the Company detect customer relationships and transactions that may involve money laundering and terrorist financing. Participating in such relationships and transactions could seriously jeopardise the Company‘s integrity and reputation.

Before entering into a supplier or customer relationship and throughout the supplier/customer relationship measures need to be taken and questions asked in order to identify any of the following events or activities, which may indicate that money laundering and/or terrorist financing is taking place:

  • A customer, agent, or proposed business partner who is reluctant to provide complete company identify information or who provides suspicious information;
  • Requests to make or accept payment in cash;
  • Structuring of transactions to avoid record keeping or reporting obligations;
  • Unusually favorable payment terms;
  • Orders or purchases that are inconsistent with a customer’s normal business;
  • Requests to make payments to, or accept payments from, third parties;
  • Unusual funds transfers to or from countries that are unrelated to the transaction;
  • Unusually complex deal structures, or payment patterns that reflect no real business purpose; or
  • Transactions involving banks in Tax Haven Countries  (as defined in Section 9.2) or unlicensed money remitters.

Should you become aware of any suspicious activity, you must immediately raise your concern with Legal. You should not proceed with any relationship or transaction that you believe raises any money laundering concerns until those concerns have been investigated and addressed by Legal, and you have been given confirmation that you may proceed with the relationship or transaction.

Active action

  • Should you become aware of any suspicious activity, you must immediately raise your concern with Legal.

9.2 Business with Counter Parties in Tax Haven Countries 

Stora Enso shall make business with a counter party in a Tax Haven Country only if the counter party runs such business with a legitimate purpose and sufficient substance.

For a variety of business reasons a supplier or customer might establish a legal entity in more than one country. There might be also proper business reasons for owning a company in a country, which offers beneficial tax treatments or where its administration is reluctant to exchange tax relevant information with other countries. For the purpose of this Policy, Stora Enso has listed certain particularly tax sensitive countries (“Tax Haven Country”) which can be found here, and will be changed from time to time. Engagement with a counter party domiciled in a Tax Haven Country is permitted only after a successful substance test. Payments to a bank account located in a Tax Haven Country are never permitted if the contracting party in question is not domiciled in the Tax Haven Country.

It is not forbidden to run an operation or a company in a Tax Haven Country, or supply or to buy goods or services from a counter party which is domiciled in a Tax Haven Country. However, as some companies use Tax Haven Countries  for tax fraud, money laundering or other illegal schemes, there are increased risks for Stora Enso to be alleged to have supported or even collaborated in an illegal activity should we do business with these counter parties. In addition to the potential juridical consequences, an involvement in tax fraud, money laundering or similar might also lead to reputational damages for Stora Enso. To keep Stora Enso’s high ethical standards and to avoid any involvement in illegal activities, Stora Enso’s shall make business with a counter party (customer or supplier) in a Tax Haven Country only if the counter party runs business in such Tax Haven Country with a legitimate purpose and sufficient substance.

Process and instructions for the substance test are as following:

  1. Identify the counter party in a Tax Haven Country In case the potential counter party is located in a Tax Haven Country or the contract indicates that the transaction shall relate to a branch located in a Tax Haven Country, a substance test shall be initiated.
  2. Fill in the substance test form
    Have the potential counter party fill in the substance test form here. This is a self-assessment to be executed by the potential counter party, requiring descriptions of the nature of its operations and necessary information to verify the substance.
  3. Assessment
    The completed substance test form shall be reviewed and assessed by the operational entity which plans to enter into business relationship with the counter party (in particular sourcing or sales). The four-eyes-principle shall be applied during such review. The guidance for assessing the substance test can be found here. Consult Group Taxes should you have any question or need supports.
    In case it is obviously or there are signs of activities which might be noncompliant with our standards, Stora Enso’s companies should not enter into business relationship with those companies.
  4. Engagement
    It is permitted to engage a counter party which is domiciled in a Tax Haven Country only after a successful substance test.
  5. Continuing business relationship
    In case there is a continuing business relationship with a counter party domiciled in one or several of the Tax Haven Countries , the substance test shall be made every 2 years.

Active action

  • Before engaging with a counter party domiciled in Tax Haven Countries , conduct the substance test, and only proceed with the engagement after a successful substance test.
  • Make substance test for counter parties domiciled in one or several of the Tax Haven Countries  every 2 years.
  • Payments to a bank account located in a Tax Haven Country are never permitted if the contracting party in question is not domiciled in the Tax Haven Country.