Global Investigations Underway

Global tax chiefs undertake an unprecedented multi-country day of action to tackle international tax evasion.

A globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion began this week across the United Kingdom (UK), United States (US), Canada, Australia, and the Netherlands.

The Initiative

The action occurred as part of a series of investigations in multiple countries into an international financial institution located in Central America. The institution’s products and services are believed to be facilitating money laundering and tax evasion for customers across the globe.

It is believed that through this institution a number of clients may be using a sophisticated system to conceal and transfer wealth anonymously to evade their tax obligations and launder the proceeds of crime.

The coordinated day of action involved evidence, intelligence, and information collection activities such as search warrants, interviews, and subpoenas. Significant information was obtained as a result and investigations are ongoing. It is expected that further criminal, civil, and regulatory action will arise from these actions in each country.

This is the first major operational activity for the Joint Chiefs of Global Tax Enforcement, known as the J5, formed in mid-2018 to lead the fight against international tax crime and money laundering. This group brings together leaders of tax enforcement authorities from Australia, Canada, the UK, the US, and the Netherlands.

The United States

Dan Fort, the US Chief of the Internal Revenue Service Criminal Investigations, expects this to be the first of many such efforts.

“Working with the J5 countries who all have the same goal, we are able to broaden our reach, speed up our investigations, and have an exponentially larger impact on global tax administration. Tax cheats in the US and abroad should be on notice that their days of non-compliance are over,” Fort said.

Australia

Australian Tax Office (ATO) Deputy Commissioner and Australia’s J5 Chief, Will Day, said that this operation shows that the collaboration between the J5 countries is working. He stated further that the combined effort of the J5 offers more power in tackling global tax crime, fraud, and evasion.

The ATO is investigating Australian-based clients of this institution who are suspected to have undeclared income. The Australian Criminal Intelligence Commission (ACIC) is playing a supportive intelligence role, and investigations into more clients may follow.

“Never before have criminals been at such risk of being detected as they are now. Our increased collaboration, data analytics, and intelligence sharing mean there is no place worldwide you can hide your money to avoid contributing your obligations,” Day said.

The Netherlands

Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), the Netherlands, said, “This is the first outcome of an operational collaboration between five countries on tackling professional enablers that facilitate offshore tax crime.

The international investigation started on information obtained by the Netherlands. By sharing this information and working together an international impact is created. Together as the J5 we will try to close the net on tax criminals.”

Canada

Canada Revenue Agency (CRA) Chief Eric Ferron said, “I am very pleased with the role the CRA is playing in what will be the first of many major operational activities for the J5. This coordinated operation shows that the collaboration between J5 countries is working.” Ferron further warns tax evaders that these combined efforts are making it difficult to hide money and avoid paying taxes.

The United Kingdom

Simon York, Chief and Director of Her Majesty’s Revenue and Customs (HMRC)’s Fraud Investigation Service said, “Tax evasion is a global problem that needs a global response and that is what the J5 provides.”

The joint initiative reinforces the commitment to take on the harmful, sophisticated, and complex crimes in order to level the playing field for honest businesses and taxpayers.

York added, “International tax evasion robs our public services of vital funds, undermines economies and, left unchecked, can enrich the dishonest at the expense of the honest majority.”

The Bottom Line

The J5 partners are working together to close the net on tax criminals. Their reach is broad and the message is clear – the J5 are closing in.