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I
Taxing Crime
a country will make more effective use of financial data, thus becoming more effective in combating money laundering,” corruption, and tax crimes (FATF 2012b, 7). In establishing robust data hosting platforms, LEAs must respect the legal protections to which suspects are entitled in access to their information. To ensure that legal protections are upheld, information received in the course of interagency cooperation must not be accessible by unauthorized persons, and information security management must be guaranteed (OECD 2015a). For example, the common transmission system (CTS)48 enables the automatic exchange of information between hundreds of jurisdictions and thousands of financial institutions.49 Resources, such as the file preparation and encryption user guides, are prepared to enable smooth and secure information sharing (OECD 2018b). See box 2.8 on the CTS standard. Data and information management is critical because the lack of secure, reliable systems may compromise cooperation within and across jurisdictions by reducing trust. Procedural safeguards, including those designed to prevent any undue access or sharing, go a long way toward fostering trust in a system (OECD 2015a). The OECD has developed a model protocol that can be used and adapted in tax matters by interested jurisdictions (OECD 2015c). BOX 2.8
The Common Transmission System Standard
The Common Transmission System (CTS) was launched in 2017 and currently supports the automatic exchange of common reporting standard (CRS) information, country-by-country reports, and tax rulings by more than 100 jurisdictions. The CRS calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. The CRS has four parts: • A model Competent Authority Agreement (CAA) providing the international legal framework for the exchange of CRS information • A common reporting standard • Commentaries on the CAA and the CRS • The CRS XML Schema In February 2020, the Organisation for Economic Co-operation and Development (OECD) released information technology formats and guidance to support technical implementation of the OECD’s CTS for the exchange of information by tax administrations. The CTS also supports a wide range of other exchanges, including on-request and spontaneous exchanges, as well as the transmission of information pertaining to mutual agreement procedures, the OECD’s Treaty Relief and Compliance Enhancement (TRACE) initiative, and other forms of cooperation.
