, Anti Money Laundering
Joined-up thinking is something it’s hard to argue against. But while it’s a great idea in theory, co-operation, communication and collaboration don’t always materialise on an in-house basis, let alone where different organisations are involved, even if they are pursuing similar aims. Now the Organisation for Economic Co-operation and Development (OECD) has taken another look at the issue from a financial crime perspective, with its new report on Improving Co-operation between Tax and Anti-Money Laundering Authorities.
Published as part of the 4th OECD Forum on Tax and Crime, held in Amsterdam from 16-17 September, the report adopts a ‘you know it makes sense’ approach. When it comes to authorities tackling issues including tax crime, bribery, corruption, money laundering and terrorist financing, it says: “In a world of limited resources and increasing complexity…Through each authority pooling their knowledge and skills, the fight against financial crimes will be more effective’.
The OECD drew on findings from a survey of 28 countries, including Australia, Chile, Malaysia, Slovenia, the UK and the US, examining their tax authorities’ access to suspicious transaction reports (STRs) and other types of unusual transaction reports and assessing the various models for sharing these. While tax bodies in around 80 per cent of respondent countries have some access to STRs in relation to tax crime – and just under 70 per cent for civil issues – the quality and scope of access varies widely: just 20 per cent or so have direct access to STRs.
Removing the barriers
The report says that while domestic legislation is the key barrier in countries where tax authorities cannot access STRs, it is the ‘conceptual and operational barriers’ that can be the hardest to break down.
And it proposes a key step towards removing those barriers – creating ‘clear communication channels’ between a tax authority and its corresponding financial intelligence unit (FIU). By improving communication, working reciprocally and adopting a joint approach to analysing and using STRs, the OECD says, both tax and anti money laundering authorities stand to make ‘potentially significant financial and efficiency gains’.
Following on from the OECD’s previous work around inter-agency co-operation in relation to tax and financial crime, the report recommends that, subject to appropriate safeguards, tax authorities have the fullest possible access to STRs received by their FIU. Jurisdictions are also urged to look at providing the legislative frameworks that make this possible and at ensuring their operational structures and procedures support the most effective use of STRs.
It’s not exactly revolutionary stuff, more a case of hammering home a common-sense message. Like joined-up thinking more generally, the OECD’s recommendations seem hard to argue against. Only time will tell if they have the desired effect.
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