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I
Taxing Crime
multiagency training, an interagency center of intelligence, and a joint operations and multiagency taskforce. Based on the self-assessment, a jurisdiction can adopt reform initiatives to improve interagency coordination to fight financial crimes more effectively. Notes 1. For definitions, see United Nations Convention against Corruption, art. 15, and Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, art. 1. The reasons for and ways in which to engage in bribery vary. Although these can include payments to secure an official act (such as a payment to an official to certify a document, clear a consignment, or jump the queue), bribes are not limited to a financial inducement. For example, authorities may agree to provide some sort of benefit in return for a specific act, service, or consideration, or for refraining to act. 2. In some countries, the payment of “commissions” to foreign officials was lawful, recorded, and tax-deductible until ratification of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. 3. Some commonly used methods to mask inappropriate payments are to record them as salaries, consultancy fees, payments for goods and services that ultimately are not delivered or rendered, and marketing expenses. 4. See Schlenther (2017, 94), who states: “The ATO’s [Australian Tax Office’s] role is explained by ‘the profit driven nature of organised crime’ and the fact that the necessary skills are available to the ATO to help with the identification of unexplained wealth that is generated through the proceeds of crime.” Also see OECD (2017b, 58), which states: “Furthermore, the various agencies may each have unique information or investigative and enforcement powers that can enhance another agency’s investigation of a particular crime. This makes co-operation amongst the relevant agencies particularly important and beneficial.” See the discussion of unexplained wealth orders later in this chapter. 5. See FATF recommendations 20 and 23. 6. As described by the National Crime Agency (UK), “Financial Intelligence, The Impact of SARs in Reducing Crime,” https://www.ukciu.gov.uk/(0bjnmzrzvyjwpwrqvvfzdg2u)/Information/Info .aspx. 7. See EU Directive 2016/680 of the European Parliament and of the Council, April 27, 2016, on (1) the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection, or prosecution of criminal offenses or the execution of criminal penalties and (2) the free movement of such data. The directive repeals Council Framework Decision 2008/977/JHA. 8. For example, the Australian Taxation Office (ATO) refers suspected criminal cases, including suspected corruption offenses as described by United Nations Convention against Corruption (UNCAC), art. 15-25, to the Australian Federal Police (AFP) for investigation and prosecution as appropriate. In cases in which foreign bribery is suspected during a taxation audit or investigation, the deductions claimed for those expenses are disallowed under the Income Tax Assessment Act 1997, sec. 26-52, and the case is referred to the AFP for investigation and prosecution as a criminal offense under Division 70 of the Criminal Code Act 1995.
