Australia's Deputy Commissioner of Taxation, Paul Duffus informed the Senate Economics Legislative Committee recently that the Australian Tax Office (ATO) has been conducting talks with Anguilla, Antigua & Barbuda, the British Virgin Islands, the Cayman Islands, Grenada, Guernsey, Jersey, the Isle of Man and the Netherland Antilles with a view to completing tax information exchange agreements.

A similar agreement was signed in November by Bermudian Finance Minister Paula Cox and Australian Treasurer Peter Costello in Washington DC. According to Mr Costello, the accord will not only provide for full exchange of information on criminal and civil matters between Australia and Bermuda, but will also boost economic ties between the two countries.

The Australian authorities have recently escalated their enforcement activities involving offshore transactions after it became apparent that a substantial amount of funds flowing in and out of the country were being transmitted through a number of offshore territories. According to Mr Duffus, an estimated A$5 billion (US$3.7 billion) flows from Australia to these jurisdictions each year.

Last month, it was reported that an ongoing investigation into undeclared offshore income by the ATO had snared an additional 187 suspects. The new suspects were uncovered as part of a comprehensive probe by the ATO and the Australian Crime Commission earlier in the year, which identified 511 cases of offshore tax avoidance and fraud. The new cases were pinpointed using data from Austrac, which monitors money flows entering and leaving Australia.

The Australian Crime Commission recently said it had raided 85 homes in four states in connection with the offshore tax investigation, issuing 48 warrants in respect of suspected tax evasion.