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#1 down

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Posted 11 April 2012 - 06:46

what does it mean when some people in the news get done for the crime of Money laundering? and how is Money laundering involved with prostitution?

#2 Oldfool9

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Posted 11 April 2012 - 06:59

what does it mean when some people in the news get done for the crime of Money laundering? and how is Money laundering involved with prostitution?


Try this:

http://en.wikipedia....oney_laundering

It's a technique used by some people/ organisations to make the proceeds of activities like prostitution (which is illegal in some countries) appear to have been earned by legal means. It can also make the tracking of money by regulatory authorities (e.g. the tax and criminal justice systems) more difficult.

If you wish to have a go yourself, I would recommend more reading though.

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#3 Coventrypunter

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Posted 11 April 2012 - 07:03

so you blaga a bank and end up with a sack full of tenners.

you need to get it into an ISA but if u turn up at the bank with a bag of tenners they have to ask awkward questions.

so you invest the tenners in a legitimate business, then your return is legitiimte and the bank will be happy.

some forms of prostitution is illegal, like running a brothel. So getting your profits into your ISA may prove difficult without a legit business alongside.

What I wonder is how indies cope with their income being in cash. Turning up at the bank with cash a few times a week must raise eyebrows, unless they pay for everything with credit cards and pay them off with the cash.

#4 Coventrypunter

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Posted 11 April 2012 - 07:04

DO NOT PUT MONEY IN YOUR WASHING MACHINE!

#5 Silverado

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Posted 11 April 2012 - 07:13

what does it mean when some people in the news get done for the crime of Money laundering? and how is Money laundering involved with prostitution?


For example, it's illegal to keep or manage a brothel and any money earned is treated as the proceeds of crime and by spending, investing, retaining the money the brothel keeper is involved in money laundering. If the proceeds are spent on houses, cars etc. or invested then the assets/money are potentially recoverable under the relevant provisions of the Proceeds of Crime Act 2002 (as amended).

#6 Lara

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Posted 11 April 2012 - 07:29

you need to get it into an ISA but if u turn up at the bank with a bag of tenners they have to ask awkward questions.

What I wonder is how indies cope with their income being in cash. Turning up at the bank with cash a few times a week must raise eyebrows, unless they pay for everything with credit cards and pay them off with the cash.


I have a business account. Money from "clothed" contracts goes in via BACS, money from escorting goes in Cash.

The biggest issue is banking hours.

I rarely pay in more than a grand, never pay in £3000 in cash, so no notifiable amounts, nor amounts the Police could question if they stopped me outside.

Yes, I do pay my PAYE!

#7 Irgendeiner

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Posted 11 April 2012 - 08:07

what does it mean when some people in the news get done for the crime of Money laundering? and how is Money laundering involved with prostitution?


Think a moment!

Ms X is an independant whore - she collects her "tributes" in cash - used £20s - and she is 100% legal (always assuming that she does her self assessment return).

Mr Z deals in counterfeit DVDs, and similar kit. He, also, collects lots of used notes.

Now whereas Mr Z's money is the proceeds of crime, and potentially liable to be seized as such, Ms X's cash is straight, and she can pay it in without the slightest risk, but, of course, there is no till roll in her case, no invoices, no delivery notes signed by the customer.

So, if Mr Z and Ms X were to make an arrangement, whereby he gave her, every now and then, a Tesco "Bag for Life" stuffed wi' used tenners, she could bank that together with her own takings, pay tax on it as if it were her own, and, if she and Mr X were an "item" she could simply pay their mortgage out of it. Otherwise they'll have to dream up some transaction whereby she pays Mr X for some service he (nominally) renders her.

I learned a while ago that a winning Tote Ticket from the race course, is, itself valuable! The lucky punter, paid in cash on sight, on simple production of his ticket, can have the ticket, stamped "PAID" back as a "souvenir". This can be very useful to a stranger to show that a pile of used money in his freezer is clean!

The "cut" that a man with serious amounts of dirty money needs to pay to get it cleaned is quite substantial, I gather.

#8 Strawberry

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Posted 11 April 2012 - 09:44

so you blaga a bank and end up with a sack full of tenners.

you need to get it into an ISA but if u turn up at the bank with a bag of tenners they have to ask awkward questions.

so you invest the tenners in a legitimate business, then your return is legitiimte and the bank will be happy.

some forms of prostitution is illegal, like running a brothel. So getting your profits into your ISA may prove difficult without a legit business alongside.

What I wonder is how indies cope with their income being in cash. Turning up at the bank with cash a few times a week must raise eyebrows, unless they pay for everything with credit cards and pay them off with the cash.


My bank has no problem with me paying in cash several times a week, why should they?they are a bank after all and probably quite happy to have my custom. I also find it has it's advantages, not many people can say they have regular contact with bank staff who are familiar with them these days.

It's common sense.
 


#9 Strawberry

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Posted 11 April 2012 - 09:47

I have a business account. Money from "clothed" contracts goes in via BACS, money from escorting goes in Cash.

The biggest issue is banking hours.

I rarely pay in more than a grand, never pay in £3000 in cash, so no notifiable amounts, nor amounts the Police could question if they stopped me outside.

Yes, I do pay my PAYE!


PAYE is for employees, not the self-employed who pay via self assessment which is usually paid in installments, or at least once every 6 months - rather than at point of earning (which is how PAYE system operates).

Edited by Strawberry, 11 April 2012 - 09:48.

It's common sense.
 


#10 Lara

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Posted 11 April 2012 - 10:14

PAYE is for employees, not the self-employed who pay via self assessment which is usually paid in installments, or at least once every 6 months - rather than at point of earning (which is how PAYE system operates).


I am employed by my limited company. I pay myself a wage & pay PAYE on that. My Company organises my Health Insurance, Gym Membership and funds my education as a benefit.

Also, if I decide to start a family, Maternity Pay is easier to manage for an employee than for a Self-Employed person.

#11 Strawberry

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Posted 11 April 2012 - 10:28

I am employed by my limited company. I pay myself a wage & pay PAYE on that. My Company organises my Health Insurance, Gym Membership and funds my education as a benefit.

Also, if I decide to start a family, Maternity Pay is easier to manage for an employee than for a Self-Employed person.


That's ok, I was just clarifying before anyone else came along and got picky. I know a few people who pay themselves via their own limited companies, does have a few benefits it appears.

It's common sense.
 


#12 Coventrypunter

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Posted 11 April 2012 - 11:22

That's ok, I was just clarifying before anyone else came along and got picky. I know a few people who pay themselves via their own limited companies, does have a few benefits it appears.


yes but be careful of the IR35 rules that say you have to have multiple clients, and not be controlled by the clinet, i.e the hours of work, or the method you do your work, and you use your own equipment to do the work.

Lara sounds OK unless she only does outcalls to one client, but less clear cut in my line in IT

problem is you cant get a sign off from HMRC to say you're IR35 compliant. they can say you are OK for last tax year, then as case law is made later they can revisit your accounts and then come back for the tax they reckon is unpaid.

#13 Lara

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Posted 11 April 2012 - 11:56

Escorting isn't the only thing I do. I've got a lot of other things going on.

#14 Vin DaLoo

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Posted 11 April 2012 - 12:58

I am employed by my limited company. I pay myself a wage & pay PAYE on that. My Company organises my Health Insurance, Gym Membership and funds my education as a benefit.


I'd hate to be sat opposite an HMRC inspector being asked to justify this scenario; us ordinary citizens do not seem to get the same indulgence as people employed in central and local government.

#15 AdorableAmy

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Posted 11 April 2012 - 13:56

What I wonder is how indies cope with their income being in cash. Turning up at the bank with cash a few times a week must raise eyebrows, unless they pay for everything with credit cards and pay them off with the cash.


Paying cash into a bank account isn't illegal - I go virtually every day if I'm working and have paid in anything up to £3000 in one go. I was asked once where the money was from when I turned up with £1900 at a branch other than my local one when I was working in London, I told them it was my earnings and the cashier apologised immediately and told me she had been instructed to ask about any amount over £1000. I got paid cash (with a payslip, in a little brown envelope) at my last civvy job too and nobody ever questioned me paying that in on a Friday afternoon. The only time I get looks is when I've been in the Channel Islands or the Isle of Man and brought the last days' earnings back, because the banknotes don't fit in the counting machine so they have to do it by hand /biggrin.png' class='bbc_emoticon' alt=':D' />.

Of course if somebody doesn't register as self employed and declare their income I would think they've got very good reason to worry what the bank think, but what the freeloading parasites do with their money is no concern of mine, and the sooner they get caught out the better (and I'm not just talking about prostitutes).

Edited by AdorableAmy, 11 April 2012 - 13:57.

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#16 Lara

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Posted 11 April 2012 - 14:21

I'd hate to be sat opposite an HMRC inspector being asked to justify this scenario; us ordinary citizens do not seem to get the same indulgence as people employed in central and local government.


My company does other work, and I occassionally need to employ other people. We pay taxes on our benefits.

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#17 WhilstNeroplays

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Posted 11 April 2012 - 15:24

Using a shop, cafe or club or anything involving high cash turnover, can help facilitate the laundering of dirty money by obfuscating its origins.

#18 Silverado

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Posted 11 April 2012 - 17:20

I rarely pay in more than a grand, never pay in £3000 in cash, so no notifiable amounts, nor amounts the Police could question if they stopped me outside.


There are no notifiable amounts. It's entirely up to the bank whether they refuse to accept the cash or decide to report it. There's no "de minimis" disclosure limit apart from the current minimum threshold amount of £250 under section 339A POCA.

If the police have reasonable grounds of suspicion that the cash constitutes criminal property then they can seize it. The current minimum amount that they can seize is £1,000 - The Proceeds of Crime Act 2002 (Recovery of Cash in Summary Proceedings: Minimum Amount) Order 2006.

Even if the amount is less than £1,000 then they can still arrest and seize as evidence under PACE 1984.

#19 snaitram99

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Posted 11 April 2012 - 21:09

I'd hate to be sat opposite an HMRC inspector being asked to justify this scenario; us ordinary citizens do not seem to get the same indulgence as people employed in central and local government.


Strange comment - 99.9% or more of people employed in central and local government are on salaries fully taxed at source under PAYE.

#20 Jimmyredcab

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Posted 12 April 2012 - 01:02

My bank has no problem with me paying in cash several times a week, why should they?they are a bank after all and probably quite happy to have my custom.


It depends how much money you are paying in, up to £2000 might not be a problem, if you turn up with £10,000 they will probably start to ask questions, if they don't believe the answers they could report you to head office where they will have a money laundering department, this could lead to all sorts of problems.

#21 Strawberry

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Posted 12 April 2012 - 06:01

It depends how much money you are paying in, up to £2000 might not be a problem, if you turn up with £10,000 they will probably start to ask questions, if they don't believe the answers they could report you to head office where they will have a money laundering department, this could lead to all sorts of problems.


Yes this is correct I am aware of the money laundering stuff regards turning up with large sums. Fortunately I don't accumulate such amounts, no need to when it's easy to pop into the bank daily.

It's common sense.
 


#22 Coventrypunter

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Posted 12 April 2012 - 07:28

Yes this is correct I am aware of the money laundering stuff regards turning up with large sums. Fortunately I don't accumulate such amounts, no need to when it's easy to pop into the bank daily.


besides I bet you pay for stuff like the supermarket etc with cash. Unlike me where i pay everything with a johnlewis partnership card to get the points (free shoppng at waitrose) and do an internet transfer when i get home. Its just a different mindset.
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#23 Irgendeiner

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Posted 12 April 2012 - 08:09

Using a shop, cafe or club or anything involving high cash turnover, can help facilitate the laundering of dirty money by obfuscating its origins.


Yeees! And, assuming that we aren't laundering a couple of quid a week, passing it through the till probably lets the VAT man in for his share! The trouble here is that IF the authorities get suspicious, they'll expect to be shewn the till rolls, and then, probably, the invoices for supplies/stock bought in.

#24 Vin DaLoo

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Posted 12 April 2012 - 13:01

My company does other work, and I occassionally need to employ other people. We pay taxes on our benefits.

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Don't get me wrong, it sounds like you have it very well organised; it's just that I know from bitter experience that when you are sat down with an HMRC Inspector randomly pulling out Invoices and asking you to justify them it is very intimidating. After nearly two decades in business I still make expensive mistakes.

#25 Vin DaLoo

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Posted 12 April 2012 - 13:07

Strange comment - 99.9% or more of people employed in central and local government are on salaries fully taxed at source under PAYE.


The vast majority will be, for sure, but I recently listened to this Podcast:

http://www.bbc.co.uk.../series/fileon4

Many examples in there of Local Government executives having their remuneration channelled through a Limited Company (avoiding Employers and Employees National Insurance)/

There was also the recent revelation that the head of the Student Loans Company was being similarly compensated:

http://www.independe...ge-6298198.html

#26 snaitram99

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Posted 13 April 2012 - 08:28

The vast majority will be, for sure, but I recently listened to this Podcast:

http://www.bbc.co.uk.../series/fileon4

Many examples in there of Local Government executives having their remuneration channelled through a Limited Company (avoiding Employers and Employees National Insurance)/

There was also the recent revelation that the head of the Student Loans Company was being similarly compensated:

http://www.independe...ge-6298198.html


These are the other 0.1% or less (probably much less) and seem to me to breach the HMRC's view of what is and is not self employment.

Sorry mods I know this is going off topic but the original assertion needed challenging. I will shut up now.

#27 Uncle Pokey

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Posted 15 April 2012 - 15:46

Just to be clear - were one an independent prostitute paying in loadsa money (earned by one acting alone) at a bank and challenged by the staff there as to the source of the money the first challenge to be made by you is: "Please tell me why you are asking me this question?"
The answer should be " Sorry Madam, but we need to satisfy ourselves that the money does not represent the proceeds of criminality"
The response then should be: " Oh fine, I can re assure you on that matter. (Leaning forward and lowering your voice) I'm a prostitute; these are my takings. Oh and fucking for money is NOT a crime. Oh and I pay tax on my income".

That should dispose of the matter.

If it doesn't then vast avenues of opportunity potentially open up to one for compensation for wrongful accusations of criminal doing. Sue the bastards I say!

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#28 Irgendeiner

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Posted 15 April 2012 - 16:41

Just to be clear - were one an independent prostitute paying in loadsa money (earned by one acting alone) at a bank and challenged by the staff there as to the source of the money the first challenge to be made by you is: "Please tell me why you are asking me this question?"
The answer should be " Sorry Madam, but we need to satisfy ourselves that the money does not represent the proceeds of criminality"
The response then should be: " Oh fine, I can re assure you on that matter. (Leaning forward and lowering your voice) I'm a prostitute; these are my takings. Oh and fucking for money is NOT a crime. Oh and I pay tax on my income".

That should dispose of the matter.


My only (so far as I know - see below) contact with money laundering regulations, is in the requirement made by my bank and my solicitors for sight of passport, (for my name and face) and utility bill or firearms certificate (for address), and recently for photocopies certified true copies by my GP. The problem lies in compliance by the bank, solicitor, accountant or similar professional, to break his professional duty of confidentiallity to his client/customer and sneak to the authorities if he is suspicious, or you do anything laid down in his regulator's "guidance". If he does that he is NOT permitted to tell the client/customer. Presumably the first that he or she knows about it is a knock on the door at 0400 hrs (the Police) or 0730 (the FSA) who ask heavy questions.

I'd say that anybody who is likely to be banking lots of used notes, but no credit card or debit card takings and few cheques, would be very wise to advise the bank manager in advance.

#29 AdorableAmy

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Posted 15 April 2012 - 16:52

Just to be clear - were one an independent prostitute paying in loadsa money (earned by one acting alone) at a bank and challenged by the staff there as to the source of the money the first challenge to be made by you is: "Please tell me why you are asking me this question?"
The answer should be " Sorry Madam, but we need to satisfy ourselves that the money does not represent the proceeds of criminality"
The response then should be: " Oh fine, I can re assure you on that matter. (Leaning forward and lowering your voice) I'm a prostitute; these are my takings. Oh and fucking for money is NOT a crime. Oh and I pay tax on my income".


I doubt the bank are the slightest bit interested in our occupations or tax status and I can't see what purpose ranting about it to the drone on the desk is going to serve unless whoever's doing it has far more free time than I have. I don't need to 'challenge' anybody - as I posted earlier, the one and only time I was asked about a cash deposit (and I've paid in considerably more in my own branch where they know me and have never batted an eyelid) I politely replied that the money was my earnings from the last couple of days, and that was the end of it. In the event that it wasn't, I would have been quite happy to direct them to the rates page on my site.
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#30 Hattie Milliner

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Posted 19 April 2012 - 10:13

I am employed by my limited company. I pay myself a wage & pay PAYE on that. My Company organises my Health Insurance, Gym Membership and funds my education as a benefit.

Also, if I decide to start a family, Maternity Pay is easier to manage for an employee than for a Self-Employed person.


Lara, I'm sure you have taken careful professional advice about this, but the view of my colleague at taxrelief4escorts seems to be that as a general strategy this is fraught with difficulties. http://wp.me/p1qxQo-c7

#31 Strawberry

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Posted 19 April 2012 - 10:43

Lara, I'm sure you have taken careful professional advice about this, but the view of my colleague at taxrelief4escorts seems to be that as a general strategy this is fraught with difficulties. http://wp.me/p1qxQo-c7


Several people have actually mentioned to me that this is a more tax efficient way to operate, and I do know of one or two non-escorting persons for whom has worked for - but not once they saw an increase in their income.

I would guess it depends on each individual case, and as the article suggests best to take careful, professional advice on the matter.

Edited by Strawberry, 19 April 2012 - 10:45.

It's common sense.
 


#32 Lara

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Posted 19 April 2012 - 12:29

I am inclined to take advice from my Accountant and from HMRC, rather than a messageboard on these things.

I am slightly surprised at the presumptions.

#33 Coventrypunter

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Posted 20 April 2012 - 07:30

I am inclined to take advice from my Accountant and from HMRC, rather than a messageboard on these things.

I am slightly surprised at the presumptions.


advice from the HMRC? you having a larf?
treat ANYTHING they say with 5 times the number of pinches of salt that you use when reading advice here.

#34 jackjones

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Posted 22 April 2012 - 17:34

I am inclined to take advice from my Accountant and from HMRC, rather than a messageboard on these things.

I am slightly surprised at the presumptions.


I have not followed the detail of the discussion but the use of a limited company may present particular problems. In the Miss Whiplash case, it was held that the use of a limited company for the purpose of prostitution was contrary to public policy (not illegal). The effect was that Miss Whiplash was taxed on her income (because it was contrary to public policy to allow it to be channelled through a company) but the expenses (considerable as she operated a well-equipped dungeon) which were incurred by the company were "trapped" within it and so not available for deduction.

Although my comments are made on a messageboard, they should be regarded as a basis for taking proper advice...all accountants are not equal. I, after all, have an intimate knowledge of the business! Anyone who relies on HMRC is a fool (poorly qualified, demotivated, and lazy).

Jack

#35 Hattie Milliner

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Posted 23 April 2012 - 08:27

I have not followed the detail of the discussion but the use of a limited company may present particular problems. In the Miss Whiplash case, it was held that the use of a limited company for the purpose of prostitution was contrary to public policy (not illegal). The effect was that Miss Whiplash was taxed on her income (because it was contrary to public policy to allow it to be channelled through a company) but the expenses (considerable as she operated a well-equipped dungeon) which were incurred by the company were "trapped" within it and so not available for deduction.

Although my comments are made on a messageboard, they should be regarded as a basis for taking proper advice...all accountants are not equal. I, after all, have an intimate knowledge of the business! Anyone who relies on HMRC is a fool (poorly qualified, demotivated, and lazy).

Jack


Absolutely agree.

And if anyone wants to follow the detail of the 3 Whiplash legal cases, we have an entertaining account here http://www.taxrelief...whiplash-cases/

#36 ClarenceNightingale

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Posted 23 April 2012 - 14:00

I must say that most of the posts on this thread are utterly stupid. If you want decent tax advice then go and see a good accountant. If you don't know what money laundering is then google it and surely you will find an answer, it is a dumb question to ask on a messageboard and you should know that you will get some really daft answers.

As for Lara's use of a limited company, I can see that if her company has many different trading activities then it would be much more profitable to use a limited company. Those of you who say there is not much difference have obviously not used the correct company structure or method of accounting. Take it from me that it is usually more profitable to use a limited company to trade if your activities are substantial and varied. It is also more tax efficient and if you non domiciled in the UK for tax purposes there are a range of ways to avoid tax (note the use of the word avoid, as opposed to evade). Basically to summise, if Lara uses a limited company then it is up to her accountant to advise her correctly and to use the most tax efficient structure depening on her circumstances.

Source of knowledge: 15 years of working/owning and advising in the UK and offshore tax efficiency and company structure sector.

Edited by ClarenceNightingale, 23 April 2012 - 14:01.