Measures to combat labour crime: Compliance agreements to exclude criminals

The Tax Administration has entered into compliance agreements with some of the country’s largest purchasers in the construction industry. The purpose is to give them a sound decision base in order to avoid awarding (sub-) contracts to criminal actors. Oslo Municipality is first to join in, and the results so far indicate that this is an effective instrument.

 

The agreement entails that suppliers who want to enter into a contract with Oslo Municipality must sign an agreement that gives the Tax Administration access to confidential information regarding employees, subcontractors and tax related matters.

Since the agreement with Oslo Municipality came into force in January 2016, the municipality has rejected 39 actors who did not have their papers in order. Additionally 88 suppliers, who wanted to enter into a contract with the municipality, had outstanding taxes to be paid before being able to enter into an agreement.

It shows that such agreements provide a better basis for decision-making when purchasers are to approve new suppliers, says tax director Hans Christian Holte.

The Tax Director believes that good attitudes and aspiration to comply with the rules by major buyers and suppliers are crucial in limiting the lee-way for criminal actors in the industry.

– Controls and sanctions are one of several measures to reduce tax evasion. But we can not control everything. Good guidance to those responsible and good systems and simplifications, which makes it easier to act right and limits the room for maneuver of the criminal actors, are essential. The cooperation agreements are an example of this, Holte says.

Facts on the compliance agreement with Oslo

• Suppliers who wish to enter into contracts with purchasers who have signed such a cooperation agreement must sign a proxy form which gives purchasers access to confidential information throughout the contract chain
• They In turn send encrypted information to the Tax Administration, which verifies that suppliers are registered in the correct registers and that they have complied with their tax obligations
• If a discrepancy is detected, the supplier is asked to account for this and if necessary pay outstanding taxes if they wish to submit a tender
• Non-complying suppliers and contractors are notified that they can be banned from future assignments with the City of Oslo.
• The aim of the compliance agreements is to exchange information that contributes to that purchasing entities who uses subcontractors, can fulfill their statutory duties, such as following the Working Environment Act, regulations regarding pay and working conditions for public contracts and to follow tax regulations and legislation.

© NTB Scanpix / Norway Today