Countries need to do more to detect and deter professionals who enable tax evasion and other white-collar crimes, a new OECD report has concluded.
The report, ‘Ending the Shell Game’, explores the different strategies and actions that countries can take to crack down on professional service providers who play a part in the planning and pursuit of criminal activity.
These “professional enablers” are crucial for white collar crimes like tax evasion, bribery and corruption, the report said, because they are often hidden behind complex legal structures and financial transactions facilitated by lawyers, notaries, accountants, financial institutions and other professionals.
The OECD said the aim of the report is to assist countries in dealing with the small subset that use their specialised skills and knowledge to enable clients to defraud the government and evade their tax obligations.
“Professional enablers often hold the key to the successful commission of white collar crimes like tax evasion, bribery and corruption, which depend on ensuring anonymity and hiding the financial trail,” said Grace-Perez Navarro, deputy director of the OECD’s Centre of Tax Policy and Administration.
“Professional enablers help criminals conceal their identities and activities through shell companies, complex legal structures and financial transactions, relying on their specialised knowledge and veneer of legitimacy. Our ongoing work is intended to help countries develop and strengthen national strategies and international co-operation to crack down on the so-called professionals, whose actions are undermining government revenue, public confidence and economic growth,” she said in a press release.
The report suggests possible strategies should aim at helping tax crime investigators identify the types of professional enablers and the risk they pose and ensuring that the law enables the prosecution and sanction of professional enablers.
The strategies to crack down on professional enablers should be multi-disciplinary and involve supervisory, industry and professional bodies, the report said. They should also make use of intelligence and investigatory powers through domestic and international agencies to tackle professional enablers operating across borders.
The OECD report further recommended appointing one lead person and agency in charge of implementing the professional enablers strategy.