On 25 February 2021 the OECD published a document entitled “Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes”. The report was prepared by the OECD Task Force on Tax Crimes and Other Crimes based on the experience of OECD countries and others.
A small number of tax advisors, lawyers, notaries, financial institutions and other types of intermediary act as professional enablers by using their skills and knowledge to set up the legal and financial structures that facilitate tax evasion and financial crimes. These professional enablers offer access to non-transparent schemes that conceal the true identity of the individuals engaging in illegal activities. During the pandemic such enablers have facilitated fraudulent access to funds intended for pandemic support.
Governments therefore need to target the professional enablers by disrupting the planning and pursuit of their activities and dealing with the criminal activity at its source. This will reduce the opportunities for financial crimes by reducing access to sophisticated tax evasion schemes. Combined with other strategies this can reduce tax and financial crime.
Counter-strategies
The report recommends counter-strategies to tackle the professional enablers. Tax crime investigators must possess the analytical skills to identify the types of professional enablers operating in their jurisdiction and understand the ways in which they market and implement tax and financial crime. Risk indicators can be developed to identify the professional enablers.
Legislation must give investigators and prosecutors the powers to prosecute the professional enablers so they can be penalised and future crime can be deterred. This may involve a special enabler liability regime and the ability to prosecute for the offence of being a professional enabler. The existing professional supervisory bodies could also be used to prevent enablers operating in the jurisdiction.
The strategy for deterring and disrupting the activities of professional enablers should involve a multi-disciplinary strategy involving the supervisory bodies and industry sectors, providing incentives for early disclosure of arrangements and encouraging whistle-blowers. Education of taxpayers and professionals should help to prevent abuse and countries could consider the introduction of mandatory disclosure rules for tax schemes.
Through cooperation between agencies on a national and international level, accurate information can be available to tackle professional enablers that operate cross-border. Mechanisms for international cooperation and exchange of information can be used in addition to mechanisms for multilateral cooperation.
Countries should appoint a lead person or agency to ensure the correct implementation of a strategy to combat professional enablers including periodic reviews of its effectiveness and modifications to the strategy as needed. The lead person can facilitate liaison among government agencies and engage in discussions with government, business and professional associations.
