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Australia-based clients of an unnamed Central American bank will now come under the scrutiny of the ATO after an unprecedented day of action by global tax chiefs.
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ATO commences action on Australians embroiled in international tax evasion probe
24 January 2020
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The Joint Chiefs of Global Tax Enforcement, known as the J5 — made up of Australia, the United Kingdom, the United States, Canada and the Netherlands — have now undertaken a globally coordinated investigation into a Central American bank suspected of facilitating money laundering and tax evasion for customers across the globe.
The unnamed international financial institution, located in Central America, is believed to be using a sophisticated system to conceal and transfer wealth anonymously to evade clients’ tax obligations and launder the proceeds of crime.
The investigations started after being first raised by the Dutch Fiscal Information and Investigation Service, and involved action including the collection of evidence and information through search warrants, interviews and subpoenas.
This is the first major operational activity for the J5, with the ATO now commencing investigations into Australia-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.
“Today’s action shows the power of our combined efforts in tackling global tax crime, fraud and evasion,” said ATO deputy commissioner and Australia’s J5 chief, Will Day.
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“This multi-agency, multi-country activity should degrade the confidence of anyone who was considering an offshore location as a way to evade tax or launder the proceeds of crime.”
It is expected that further criminal, civil and regulatory action will arise from these actions in each country.
The J5 was formed in 2018 in response to a call to action from the Organisation for Economic Co-operation and Development (OECD) for countries to do more to tackle the enablers of tax crime.
“This is the first coordinated set of enforcement actions undertaken on a global scale by the J5 — the first of many,” said Don Fort, US Chief, Internal Revenue Service Criminal Investigation.
“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.”
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