A toolkit for LEAs and tax authorities

24 Apr A toolkit for LEAs and tax authorities

Posted at 13:34h in I research fraud, tax crimes and corruption, I want to identify vulnerabilities in tackling tax crimes and money laundering, I work in tax crime investigation and prosecution on a national an international level by

Summary

Underlying gaps in the investigation and prosecution of tax crimes including the lack of a unified tax crime definition in the EU as well as national variations of legal instruments, criminal justice systems hinder the detection, prevention and prosecution of tax crimes. This toolkit is designed to address these gaps by setting common standards in the form of harmonised approaches and methods and presenting a reliable and user-friendly information resource that can be applied across the EU by law enforcement agencies and tax authorities.

PROTAX leverages this approach as a tax fraud investigation framework (TFIF) which constitutes the core of this toolkit and has been co-created by direct inputs from various stakeholders, practitioners and academic experts in the field of tax enforcement and tax fraud investigation. It aims at identifying common methods of investigation of tax crimes and facilitating successful investigations and prosecutions of tax crimes. The tax fraud investigation framework (TFIF) is designed for a diverse audience as a ‘how to’ manual for practitioners — law enforcement officials, tax authorities, investigating magistrates, Financial Intelligent Units and prosecutors — as well as for asset managers and those involved in making policy decisions in both civil and common law jurisdictions.

The tax fraud investigation framework (TFIF) aims at promoting:

  • a consistent and logical procedural approach to countering tax fraud at national and EU levels by encouraging the adoption of common methods and techniques for investigating and prosecuting tax fraud
  • a harmonised standard for working across different agencies (multi-agency working) at national and EU levels
  • best practices to prevent and counter tax fraud by discouraging the criminals from expanding into new fraud ventures
  • savings of time and resources during cross-jurisdictional legal analysis thus enhancing initial investigation
  • effective pathways for transforming information to intelligence and to build an effective response to transnational VAT fraud
  • information on the different types of evidence necessary for securing a conviction in selected EU Member States. Some of the benefits of successful criminal prosecution for tax crimes include societal recognition of the criminal nature of these offences and the subsequent accountability of the perpetrators.
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Key Findings

  • The tax fraud investigation framework (TFIF) provides a common basic framework that can be tailored to national legal contexts but can also enable practitioners to inform themselves about other tax eco-system and legal frameworks so that collaboration and joint investigations can become more efficient.
  • The tax fraud investigation framework (TFIF) highlights the need for more advanced and streamlined means of gathering information and intelligence, including access to data from law enforcement agencies and financial intelligence units, and the use of provisional measures and coercive investigative techniques.
  • Factors that influence investigation and prosecution of tax crimes include procedural laws and investigative powers; standards of proof and laws governing evidence; incentives to disclosures and whistleblowing; international cooperation in criminal matters; interagency cooperation and information-sharing; and enforcement of law in the books.
  • For a successful investigation and prosecution of tax fraud, there has to be in place a comprehensive plan of action that incorporates a number of important strategic and procedural steps and considerations such as identifying appropriate facts, key partners, communication with other LEAs, peculiarities of other jurisdictions, and case management. EUROPOL, EUROJUST, EU Financial Units Platform, OLAF, EPPO, and European Judicial Network are just a few examples of agencies at the EU level that support the investigation and prosecution of transnational tax fraud.
  • The tax fraud investigation framework (TFIF) foundations for addressing strategic and procedural issues are investigation/building a case, offender management, operational learning and training, recovery of assets, and identification and securing of assets; and the recommended actions by investigating authorities are detection, investigation, enforcement, evidence assessment, and operational learning.

Please note that the law cited were valid and correct at the time of the reports publication.