As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
New York Times: Global Crackdown on Tax Crimes Intensifies
David Jolly of the New York Times reports that the United States, France, German and Great Britain are working together offshore and other types of tax evasion:
The global body that sets standards for combating money laundering and terrorist financing said Thursday that governments should treat tax crimes as a red flag for other types of financial malfeasance, a sign that international cooperation against tax cheats is gaining momentum.
The body, the Financial Action Task Force, said it was expanding its list of “predicate offenses for money laundering” to include serious tax crimes.
The task force, based at the Organization for Economic Cooperation and Development here, also updated its so-called blacklist of noncooperative countries and territories for the first time in several years.
The changes reflect a growing movement toward international cooperation to catch tax cheats. Governments have become much less lenient on the subject since the financial crisis began four years ago, with tax havens like Switzerland coming under pressure to cooperate.
On Feb. 8, six countries, including the United States, France, Germany and Britain, announced that they would work together to fight tax evasion in the context of putting the Foreign Account Tax Compliance Act in place, a United States initiative to find hidden accounts overseas.
The task force has no enforcement powers of its own, but the recommendation “means the proceeds of tax crimes must now be considered” by governments, Richard Chalmers, co-chairman of the body’s working group for assessing compliance, said at a news conference.
The focus is not on tax evasion per se, but rather on how ill-gotten gains might be put to use. Officials acknowledged that the definition of tax crimes differed from country to country and that it would be up to national officials to define and act on the information they found.
The task force operates by consensus, and officials declined to say which countries had supported or opposed the new initiative. But the Swiss Banking Association said in a statement that it had “always expressed skepticism concerning the addition of tax crimes” to the task force’s list of offenses, and that it welcomed “the fact that the F.A.T.F. leaves it up to the respective countries to define the terms of the crime as predicate offense for money laundering.”
The task force, whose agenda includes the fight against financing nuclear proliferation, last revised its guidelines in 2003. The issue of tax crimes was proposed as a topic for inclusion at the last revision, but failed to make the final text. The inclusion in the new guidelines shows the extent to which the international climate has changed since then.
Officials said at the news conference that the task force was no longer separating measures for combating terrorist financing from its main recommendations because there was much in common with other criminal money laundering, rendering the distinction moot.
The task force was working to ensure that governments knew who were the “beneficial owners” of businesses within their jurisdictions, officials said.