Tax fraud experts join forces to tackle serious and organised tax crimes

During 8-9 November 2012, over 80 delegates from 28 countries – including the United States, Russia and the Ukraine – and organisations including the European Commission and Eurojust attended a conference at Europol on tackling serious and organised tax crimes. Co-hosting the event with Italy’s Guardia Di Finanza and Belgium’s ISI (Special Tax Inspectorate), Europol’s Financial Crime department welcomed experts, tax administrators, investigators and tax fraud prosecutors to discuss practical measures for a multidisciplinary approach to combat the actions of organised criminals undertaking financial crimes.

Those who perpetrate financial crimes, such as Value Added Tax fraud, are becoming increasingly sophisticated in their methodologies. Currently, we have reached a situation whereby organised criminal groups, based both within and outside the European Union, are orchestrating large scale attacks on EU Member States’ exchequers by carefully monitoring “the market” for further opportunities offered by diverse commodities or deregulation of certain markets, such as the gas and electricity sectors.

Organised criminal groups almost routinely employ the knowledge of specialised facilitators and mechanisms, frequently situated outside the European Union, to mask their fraudulent activities, take advantage of loopholes in legislation governing financial practices and ultimately trawl the plethora of schemes and safe havens available to launder the proceeds of their crimes.

VAT fraud alone in the European Union costs Member States approximately 100 billion euros a year - scandalous enough in settled economic times, but now placing an intolerable burden on our citizens, as governments strive for stability via a raft of austerity measures.

For all parties working against the fraudsters, the most prevalent challenge is to reconcile administrative enforcement with the ever increasing tendency to fight tax crimes by means of criminal law.  The danger of “double jeopardy” in financial investigations, whereby no person is liable to be tried or penalised again for the same offence for which they have been acquitted or convicted, causes legal difficulties at a national level, whilst in a cross-border context these become even more complicated as the approach may differ from jurisdiction to jurisdiction.  It is therefore essential to determine the balance between these two means of investigation to enable “criminal intelligence” to be cross-pollinated and enriched with “fiscal intelligence” and vice versa.

In hailing the first occasion that such a multidisciplinary conference on tax crimes had been hosted on Europol premises, Director Mr Rob Wainwright said “Fighting tax crimes is a priority for the EU. Europol support Member States’ law enforcement agencies to identify, disrupt and where possible dismantle the organised crime networks which set up or facilitate large-scale tax fraud. We do this in parallel to our partners who pursue such criminality using the administrative powers vested in them. This conference reinforces my view that both approaches are mutually beneficial and better protect the interests of our citizens.”