Tax authorities are increasingly demanding in terms of demonstrating that everything done by a company is perfectly in accordance with current regulations. Sometimes, not being able to demonstrate something precisely can lead to serious problems.

Our client was mistakenly involved in a money laundering scheme. This is a company dedicated to the import of products from China for 20 years. About 15 years ago, it was not necessary for transactions to be carried out entirely through banks. Therefore, initially, there was no reliable record of each and every money transfer.

This company, at the time of the freezing of bank financing around 2008, had to resort to non-bank loans. The loans were arranged through an intermediary who advanced the money by paying the Chinese supplier.

The merchandise was received in Spain and, once our client had money, they paid the intermediary in cash in Spain the amount borrowed plus interest.

Obviously, if the analysis was reduced to bank transactions, little could be done.

So we decided to go further and analyze:

• The Chinese companies to determine if they were real companies with seniority that manufactured products or shell companies.
• The customs documentation that proved the arrival of the product.
• The general and daily ledger of accounting to review the accounting entries and especially the cash movements.
• The documentation produced by the Chinese companies.
• Our client’s sales to stores and small distributors.

We managed to demonstrate that the business existed, was legal, and was up to date with its tax situation. The administrator managed to avoid very serious criminal consequences.