OECD: ‘Whole of government’ approach needed to tackle financial crimes
The OECD has called for increased co-operation and information sharing between countries’ money laundering and tax administrations to fight financial crimes.
The OECD has called for increased co-operation and information sharing between countries’ money laundering and tax administrations to fight financial crimes.
OECD said that a ‘whole of government’ approach, where tax authorities have a key role in not only identifying tax evasion but also identifying and reporting other suspected crimes such as bribery, corruption, money laundering and terrorism financing was needed.
It said this in a report titled Improving Co-operation between Tax and Anti-Money Laundering Authorities launched at the end of September during the fourth OECD forum on tax and crime.
“There are potentially significant financial and efficiency gains to be realised by both tax administrations and money laundering authorities from increasing their levels of co-operation, information sharing and, more specifically, in taking a joint approach to analysing and utilising Suspicious Transactions Reports (STRs),” the OECD said.
It said subject to safeguards, tax administrations should have the fullest possible access to STRs received by the Financial Intelligence Units (FIUs) in their jurisdiction.
“In a world of limited resources and increasing complexity it is more important than ever that government authorities work together in a ‘whole of government’ approach to pursue shared objectives.
“This is certainly the case in the area of financial crimes, where financial flows are increasingly complex and the previous divide between the authorities combatting financial crimes such as money laundering, terrorism financing, bribery and corruption and those tackling tax evasion is becoming increasingly blurred,” the report said.
Nevertheless the report notes that barriers remained. It said there are cases where legal gateways to access STRs exists, however there is no obligation for FIUs to actually share STR information.
There are also situations where access is only provided on request, meaning the tax administration must already have a certain level of suspicion in order to access the STR information.
Other jurisdictions rely on FIUs spontaneously exchanging information it considers relevant to the tax administration.
“These results show that more can be done by governments to maximise their effectiveness in tackling financial crimes and ensuring tax compliance by removing barriers to greater co-operation between FIUs and tax administrations,” the report adds.
The OECD said the main benefits of FIUs sharing STRs with tax administrations is an increase in the ability to identify a range of serious crimes as well as being able to access an additional source of information that can be used to ensure tax compliance.
It said what differentiates STRs from other information sources tax administrations use is the nature of the interactions being reported.
“This adds a particular quality to STRs as a source of information, which provides insight and context into the dynamics of the data subject including identifying information, details of conversations, explanations and behaviours, which are critical components in identifying areas of potential non-compliance,” the report said.
The full report can be downloaded at http://www.oecd.org/tax/crime/improving-cooperation-between-tax-and-anti-money-laundering-authorities.htm
* It is worth noting that Commercial Crime Services’ Financial Investigation Bureau (FIB) was set up in direct response to investigate matters associated with money laundering, fraud and terrorism financing.
It does this through providing individual, focused and direct responses to requests made by its members by employing a research and analytical methodology against each and every enquiry.
More information about FIB can be found at https://www.icc-ccs.org/icc/fib