ICIJ focusing on professional advice given
At the recent Anti-Money Laundering and Financial Crime Conference held by the Association of Certified Anti-Money Laundering Specialists in Las Vegas, Michael Hudson, senior editor of the International Consortium of Investigative Journalists (“ICIJ“), gave an interesting presentation on the ICIJ’s work in exposing the use of offshore tax havens – known as the “offshore leaks” investigation.
The offshore leaks investigation identified the existence of over 120,000 offshore companies and trusts used by high-net worth persons and entities around the world. It terms of sheer impact, it was the biggest business story of 2013, resulting in sweeping legislative and policy changes in tax law worldwide and numerous investigations, as well as the toppling of many high-ranking officials.
The ICIJ’s says its work in exposing offshore leaks is not over. It is now focusing its efforts on the role of those professional facilitators who, Mr. Hudson said, advised and assisted clients in creating offshore entities and trusts in tax havens to facilitate tax evasion.
As Mr. Hudson pointed out, incorporating companies and setting up trusts is not illegal in jurisdictions that are known as tax havens, and obviously neither is the use of professionals. The issue is whether professional advisors gave advice on the movement of wealth offshore, or assisted politically exposed persons do so, in contravention of anti-money laundering and tax laws.
Over 2 million taxpayer records
The ICIJ has an enormous amount of evidence to work with. It was given, anonymously, a hard drive with 2.5 million tax payer records identifying more than 100,000 individuals, entities and trusts from over 170 countries, including tens of thousands from Canada and the U.S. with bank accounts in foreign jurisdictions with lax tax rules or strong bank secrecy rules.
The hard drive contains 30-years of emails and other records of transactions and communications used by taxpayers, accountants, lawyers and others in multiple countries to set up foreign companies and move assets. The evidence is the biggest stockpile of inside information about the offshore movement of assets ever obtained by a media organization, more than 160 times larger than the leak of U.S. State Department documents by Wikileaks in 2010.
The ICIJ offshore leaks investigation identified several high profile PEPs, including Pana Merchant, a Canadian Senator, and Thailand’s international trade representative, Nalinee Taveesin. Taveesin is not only a PEP but in 2008, she was listed by The U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC“) as a designated person because OFAC determined that she assisted the Mugabe regime complete several financial transactions.
The ICIJ, a network of approximately 175 journalists, was started in 1998 by a producer of 60 Minutes and gained international attention in April when its members released the story of the use of offshore entities by wealthy people around the world.