Establishing Exchange of Information Channels for Tax and Criminal Investigative Agencies
BOX 2.2
I
15
Country Examples of Parameters around Information Sharing
New Zealand. The tax authorities follow a case-by-case approach to sharing information on serious crimes (Schlenther 2017). In doing so, they weigh whether the request is “fit for purpose,” balancing privacy rights and the benefits for society of the information sharing. Relevant factors include the nature of the crime, the scope of the request, the intended use of the information, the ability of the tax authority to provide it, and the risk of error and misuse on the part of the recipient agency. South Africa. Conditions and limitations on access to tax information from South Africa’s tax authority, the South African Revenue Services (SARS), by the financial intelligence unit (FIU) and other law enforcement agencies are codified in law. Although the statutory language allows for a great deal of discretion by SARS, notably allowing spontaneous information sharing, it also provides specific parameters for it. In particular, under the Tax Administration Act,a the sharing of tax information must be necessary, relevant, and proportionate. It may be refused if SARS determines that the disclosure would seriously impair a tax investigation (although a court order could override it). The Financial Intelligence Centre Actb allows an FIU to have access to tax information from SARS as long as the information is required for the FIU to perform its duties and functions. All agency recipients of tax information from SARS are required to uphold the confidentiality of the information. a. South Africa, Tax Administration Act, 2011, Act No. 28 of 2011, https://www.gov.za/sites/default/files/gcis _document/201409/a282011.pdf. b. South Africa, Financial Intelligence Centre Act, 2001, Act No. 38 of 2001, https://www.gov.za/sites/default/files/gcis _document/201409/a38-010.pdf.
relation to a specific set of offenses, it runs the risk of preventing sharing about new offenses not previously accounted for. 2. Legislation can restrict the use of information shared between agencies. For example, it may allow the information shared to be used for investigative purposes, but not as admissible evidence in judicial proceedings (for more on this, see chapter 3). Such a restriction could hinder prosecution of the offenses being investigated. 3. Legislation can require burdensome preconditions for sharing information that add cost and time to investigations. For example, laws can require LEAs to launch a criminal proceeding or obtain a court order to access tax information pertinent to their investigation. Where these preconditions are deemed necessary and proportionate to safeguard confidentiality, the OECD and the World Bank recommend streamlining these processes by, for example, providing standardized templates to request a court order, as in the United States (OECD and World Bank 2018).16 4. Legislation can limit information sharing to that made “on request.” This limitation creates a situation whereby an agency—such as a tax a uthority—becomes aware of information relevant to another agency’s mandate, and yet it is not able to share the information because it has not been requested.17
