Through the international efforts, Australia’s Serious Financial Crime Taskforce (SFCT) has identified 340 Australian citizens with links to Swiss banking relationship managers alleged to have actively promoted and facilitated tax evasion schemes. In the UK, the suspected head of an organised crime group involved in drug trafficking, VAT fraud and money laundering was one of six people arrested as part of an international multi-agency operation on March 28. Meanwhile, in the Netherlands, the Dutch office for financial crimes prosecution (FIOD) detained two individuals suspected of tax evasion and money laundering.
The coordinated raids involved millions of dollars of undeclared assets linked to 3,800 Dutch-linked accounts in a Swiss bank. The authorities did not name the bank, but Switzerland's second biggest bank, Credit Suisse, has said it had its offices raided in five countries in relation to a tax probe.
"Credit Suisse has had this coming for years, and cannot pretend it is unexpected or undeserved," said Miles Dean, managing partner at Milestone International Tax. "Swiss banks have been at the core of tax evasion for decades. Switzerland’s USP was bank secrecy and the fact that under Swiss law tax evasion isn't a crime."
"Any notion that Swiss banks are better at banking than other banks in other countries is simply untrue, they just don’t play by the rules," Dean said.
Ongoing investigation
Australian Minister for Revenue and Financial Services Kelly O’Dwyer said that information gathered by the SFCT through the international collaboration indicates that the Australians identified hold unnamed numbered accounts with a Swiss bank. In the coming week, the SFCT will interview bank employees, taxpayers and lawyers as part of its investigation into whether Australians identified in the data have failed to comply with their tax obligations or are involved in criminal activity.
“The fact that these accounts are unnamed means that by their very nature they are likely to have been established to hide the identity of the owner,” O’Dwyer said. “Taskforce agencies are working through their intelligence to determine the taxpayers in this group who have done the right thing, and those who have been concealing the true nature of their tax affairs.”
“As revenue authorities continue to gather and share intelligence in the coming weeks, they expect to move quickly to pinpoint those people who’ve deliberately promoted or willingly participated in these schemes,” she continued.
In the UK, Adam Warnock, the operations manager at the National Crime Agency (NCA), said the organisation’s international partnerships mean it has been able to extend the UK’s reach overseas to tackle serious financial crime. The UK has also enacted legislation that targets tax advisers, accountants and lawyers who facilitate offshore tax evasion by implementing tougher penalties. The new powers, which entered into effect on January 1 2017, allow HMRC to fine individuals or corporates who take deliberate action to help others evade tax. They can face fines of up to 100% of the tax they helped evade or £3,000, whichever is highest, and also be publically named and shamed.
“The message from these investigations makes it clear that governments worldwide are shining a light on offshore tax evasion, and it’s only a matter of time before you’re in the spotlight,” said Australia’s O’Dwyer.
