Tax agencies draw up ‘target list’ of offshore enablers

OECD, Paris, France

Tax agencies from 30 countries convened in Paris this week to take part in the largest ever simultaneous exchange of tax information and to share results and details on thousands of investigations sparked by the Panama Papers.

The meeting of the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC), an informal grouping of tax agencies, was held on January 16 and 17 in Paris at the Organisation for Economic Cooperation and Development (OECD). In a press release after the meeting, JITSIC called the event “historic,” and said the meeting included the largest ever simultaneous exchange of information as agencies sought to coordinate and collaborate on tax investigations.

The tax agencies in attendance have reportedly audited more than 1,700 taxpayers, have made more than 2,550 requests for information and have identified a “target list” of 100 intermediaries – lawyers, bankers, accountants and others who help wealthy individuals and companies set up and use tax havens – for further investigation. “Large numbers of taxpayers” had also come forward voluntarily to come clean on their offshore assets, JITSIC announced.

JITSIC is a voluntary gathering open to the 36 members of an OECD body that includes the United States, Canada, China, Germany, India, South Africa and Russia. It is unclear which six countries did not participate in this week’s JITSIC meeting. The U.S. Internal Revenue Service did not respond to questions about whether or not it attended the meeting.

JITSIC refused to make further comments on the meeting and said discussions and information shared at the meeting are confidential.

Following the Panama Papers, which revealed the central role of lawyers and bankers in facilitating tax evasion and other financial crimes, the United Kingdom and other countries brought in new criminal penalties for companies who aid tax dodging.

“With Panama Papers, the level of interest was rapidly mobilized,” Mark Konza, deputy commissioner of taxation at the Australian Tax Office, told ICIJ in October about the first emergency JITSIC meeting convened hurriedly days after the publication of Panama Papers. Australia’s taxation commissioner, Chris Jordan, is the chair of JITSIC and has led recent Panama Papers discussions.

According to Konza, JITSIC had previously been a boutique assembly of a dozen or so countries. Panama Papers helped changed that.

“At an administrative level, you now have revenue administrations working on a level that they’ve never done before,” Konza said.

John Christensen, Chair of the Board of the Tax Justice Network, told ICIJ that networks of intermediaries are often responsible for enabling wrongdoing in the world of offshore finance.

"Tackling the enablers is key to restoring public confidence in tax systems and, more generally, the rule of law," Christensen told ICIJ.

"Enablers are typically professional bankers, lawyers and accountants; in other words, privileged elites who mis-use their status to undermine the systems of rules and practices that shape modern societies. In too many cases, professional guidelines are weak and inadequate to the task of preventing enablers from ignoring the law in order to further their own and their client's interests. This lack of integrity has fed public disillusionment in the very notion of professional integrity."

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