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Australia Makes Progress In Offshore Crackdown

by Mary Swire,, Hong Kong

15 August 2007

Australia's Treasurer, Peter Costello, and Minister for Justice and Customs, David Johnston, announced yesterday that the government's offshore crackdown, known as Project Wickenby, has made significant progress on a number of fronts.

According to the officials, there is early evidence of a significant improvement (nearly 70%) in the net tax payable by individuals and companies identified as part of Project Wickenby. In addition, the Australian Taxation Office has raised more than A$50 million (US$42 million) in liabilities from finalising tax assessments, penalties and interest, and from taxpayers making voluntary disclosures.

Project Wickenby is a multi-agency taskforce investigating and prosecuting internationally-promoted schemes to avoid or evade Australian taxes and launder money.

The Australian Crime Commission, the Australian Federal Police and the Australian Securities and Investments Commission (ASIC) have 20 criminal investigations in progress. One investigation recently led to the conviction and sentencing of a high-profile Australian for three offences, including defrauding the Commonwealth.

More than 100 additional civil and criminal inquiries are currently in progress, and civil-based action under the Proceeds of Crime Act 2002 has been brought in two matters, with property to the value of more than A$12 million restrained.

As part of the 2006-07 Budget, the Government announced funding of more than $300 million over seven years for Project Wickenby. In addition to the Crime Commission, the Federal Police and ASIC, the initiative combines the capabilities of the Australian Taxation Office and the Commonwealth Director of Public Prosecutions, supported by the Australian Government Solicitor, the anti-money laundering agency AUSTRAC and the Attorney-General’s Department.

Costello and Johnston said that the Taskforce has increased the capability of the Commonwealth to respond to threats to revenue, including threats instigated offshore.

Amendments to tax secrecy provisions that were enacted in April 2007 allow the Commissioner of Taxation to share information more effectively with other government agencies, to facilitate law enforcement activities for Project Wickenby.

This has assisted Taskforce agencies to work cooperatively in the detection and prosecution of fraud, money laundering and international tax avoidance and evasion, according to the government.

Project Wickenby has also led to the signing of Tax and Information Exchange Agreements (TIEAs) between Australia and offshore jurisdictions, including Antigua and Barbuda, Bermuda and the Netherland Antilles.

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