Developing Interagency Exchanges of Information at the Regional and International Levels
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In demanding cross-border investigations—that is, when a Member State’s investigations into criminal offenses require complex, demanding investigations having links with other Member States. • In connected investigations requiring coordination—that is, when a number of Member States are conducting investigations into criminal offenses in which the circumstances of the case require coordinated, concerted action in the Member States involved.
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The Missing Stone Trader case is an example of such a transnational investigation of tax fraud. This case, which involved a value added tax (VAT) carousel, elicited a high degree of national cooperation to audit suspected companies and international cooperation between police and tax authorities in three countries to examine payments and invoices and to verify the transport for sale of stone from country 1 to country 2 (see case 3 in the appendix). Uncovered in 2013, the scheme incurred €27.5 million in lost VAT revenue for both countries. The case included the collection of data on 67 front companies, the interception of communications between perpetrators, covert surveillance, and various tracking technologies. Overall, 29 searches were conducted of businesses and private residences to seize documents, records, and computers. As the Missing Stone Trader case demonstrates, JITs can be beneficial in investigating cases of tax fraud and can include tax auditors. As explained in the practical guide drawn up by Europol,6 contributions from persons who are neither law enforcement nor judicial authorities are often beneficial to the outcome of an investigation. When seconded, JIT members not from LEAs, including agents from tax authorities, may be entrusted by the JIT leader of the country in which the team operates to carry out investigative measures. 4.3 Using Anti-Money Laundering Tools to Pursue International Tax Evasion
4.3.1 Overview When law enforcement agencies launch a money laundering investigation involving assets or transactions in another jurisdiction, they often request informal assistance and mutual legal assistance (MLA) in criminal matters in seeking information or evidence, help with the extradition of a suspect, or overall support in freezing or seizing assets. This information can also be highly relevant to authorities tackling tax evasion (IMF 2012). If a crime is identified as a predicate offense to money laundering, the offender may be investigated for both the original crime and for money laundering (IMF 2012). When considering whether to include tax crimes as predicate offenses, the Financial Action Task Force (FATF) surveyed the national legislation adopted by a number of OECD countries to determine their experience in using the anti-money laundering (AML) framework to combat tax crimes and identify the extent to which the
