Financial Crimes & Their Facilitators

Five Countries Join Forces to Target Financial Crimes & Their Facilitators

This is the second in our series of articles looking at some of the topics to be discussed at our November 2018 conference, Beyond Borders: International Taxation into 2020. More specifically, one of the panels will look at the EU proposal to target intermediaries selling aggressive tax planning schemes and its effect on the fundamental freedoms within the EU. Book your early bird ticket HERE before it’s too late!

Following a meeting in Montreal earlier this week, Canada, the USA, the United Kingdom, Australia and the Netherlands have agreed to join forces to combat tax evasion and other likeminded financial crimes at a global level.

As reported by Kathleen Harris for CBC News in Canada, tax agencies from the five countries, led by the US Internal Revenue Service (IRS), will form the Joint Chiefs of Global Tax Enforcement (the J5), a new tax enforcement alliance that will aim to curtail “offshore tax evasion, fraud and money laundering.”

According to information released by the IRS, writes Harris, this task force “will build enforcement capacity by sharing information and intelligence, piloting new initiatives and carrying out joint operations.”

Furthermore, reports Michael Cohn for Accounting Today, the group’s main objective is “to bring perpetrators who enable and facilitate offshore tax crime to justice.”

This move stems from a November 2017 call from the OECD to target professionals who help their clients get away with financial crimes.

Hence, the J5 will look particularly close at these specific practitioners along with cybercrime and illegal activities involving cryptocurrencies.

Bloomberg’s Siri Bulusu explains that details on this initiative are yet not very clear, as “the officials on the call didn’t specify how the tax data would be shared, or what measures were being taken to guarantee the security of sensitive financial information.”

Officials of the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty's Revenue & Customs (HMRC) and the US’s Internal Revenue Service Criminal Investigation (IRS-CI) will be part of this major effort.

The US, UK and Canada On Board with Financial Crime Alliance

The US, UK and Canada On Board with Financial Crime Alliance

Don Fort, Head of the IRS’s Criminal Investigation unit, said, “We cannot continue to operate in the same ways we have in the past, siloing our information from the rest of the world while organized criminals and tax cheats manipulate the system and exploit vulnerabilities for their personal gain.”

“The J5 aims to break down those walls, build upon individual best practices, and become an operational group that is forward-thinking and can pressurize the global criminal community in ways we could not achieve on our own,” Fort added.

Simon York, who heads the UK’s HMRC’s fraud investigation division, concurred, saying in a statement, “The formation of the J5 shows our commitment to leading that fight. Working together we are broadening the horizon of tax crime enforcement, making the world smaller for those seeking to exploit our systems and ensuring no one is beyond our reach.”

Furthermore, Johanne Charbonneau, Director of the CRA’s Criminal Investigations Directorate, believes the J5 shows her country’s “commitment to cooperation in the fight against international crime.”

In your opinion, how effective will the J5 be? What’s needed for them to efficiently operate and fight financial crime? Will this make your job as a financial service provider more difficult?

Share your opinion with us in the comments section!