OECD steps up the fight against enablers of tax and financial crimes

Robert CaringtonThe Organisation for Economic Co-operation and Development’s (OECD) Task Force on Tax Crimes and Other Crimes launched its new report, Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes, during the 2021 OECD Global Anti-Corruption & Integrity Forum this week. The report sets out a range of strategies and actions for countries to tackle professional intermediaries who enable tax evasion and other financial crimes on behalf of criminal clients.

The panel for the launch event included Jim Lee, US Internal Revenue Service; Caroline Lee, International Ethics Standards Board for Accountants (IESBA); Grace Perez-Navarro, OECD; and Simon York, HMRC. The webinar was moderated by Will Fitzgibbon of the International Consortium of Investigative Journalists.

The event highlighted the damaging role played by intermediaries who enable financial crimes on behalf of their criminal clients, and their increasingly sophisticated technical methods, such as the use of cryptocurrency. The panel agreed that concerted domestic and international action is needed to clamp down on the enablers of crime. They recommended a closer partnership between public and private sectors to report on non-compliance and prevent such crime. Countries were urged to increase their efforts to better deter, detect and disrupt the activities of professionals who enable tax evasion and other financial crimes.

The report states that the majority of professional service providers are law-abiding, and play an important role in assisting businesses and individuals to understand and comply with the law. However there is a small subset that abuse their specialised skills and knowledge to enable clients to defraud the government and evade their tax obligations, and these need to be tackled.

The report calls on countries to establish or strengthen national strategies to deal with professional enablers more effectively. Such strategies should:

  • ensure that tax crime investigators are equipped to identify the types of professional enablers operating in their jurisdiction, and understand the risks posed by how they devise, market, implement and conceal tax crime and financial crimes;
  • ensure the law provides investigators and prosecutors with sufficient authority to identify, prosecute and sanction professional enablers, both to deter and penalise;
  • implement multi-disciplinary prevention and disruption strategies, notably through engagement with supervisory, industry and professional bodies, to prevent abusive behaviour, incentivise early disclosure and whistle-blowing and take a strong approach to enforcement;
  • ensure relevant authorities proactively maximise the availability of information, intelligence and investigatory powers held by other domestic and international agencies to tackle sophisticated professional enablers operating across borders;
  • appoint a lead person and agency in the jurisdiction with responsibility for overseeing the implementation of the professional enablers’ strategy, review its effectiveness, and devise further changes as necessary.

Robert Carington is Policy Executive at STEP

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