How is it decided which agency leads an individual investigation? What powers do the Project Wickenby agencies have and when do they enforce them?
Each of the agencies could come across matters in their day-to-day work that they believe may relate to Project Wickenby. These matters may be tabled at a cross-agency forum to determine the most appropriate response, which could include referral for criminal investigation. If it appears there are possible crimes being committed, which include tax fraud and money laundering, then agencies such as the ACC and the AFP will be asked to assist with the case.
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Each agency has its own statutory powers and functions, which are summarised below.
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ATO: conducts analysis, reviews and audits related to tax. Where it has been determined that the correct tax has not been paid, we will raise tax assessments and seek to recover the proper tax due, together with penalties and interest. We have officers that assist other agencies with criminal investigations by providing tax and financial analysis expertise relating to Wickenby-type schemes.
ACC: conducts criminal investigations and manages the ensuing litigation. They will assist the ATO and AFP in dismantling organised syndicates. The ACC shares the intelligence it collects and analyses that is related to offshore organised tax fraud schemes.
AFP: conducts criminal investigations into tax haven schemes and other criminal matters that may be unearthed as a result of the initial investigation. The ATO often refers cases to the AFP.
ASIC: has the power to investigate matters where it has reason to suspect there may have been a contravention of the Corporations Act 2001. ASIC may take its own enforcement or regulatory action to enforce such contraventions and these could include contraventions relating to market manipulation or a failure to comply with director's duties, among other matters.
AUSTRAC: provides intelligence and data sharing under the terms of the memorandum of understanding between AUSTRAC and the ATO, AFP, ACC and ASIC. AUSTRAC also provides analytical and intelligence support.
CDPP: will progress prosecutions that result from Project Wickenby and be involved in cases, where appropriate, as early as possible. Prosecutorial activity will include summary offences, proceeds of crime actions and complex criminal prosecutions.
AGS: (Australian Government Solicitor) provides high-level advice on legal risks and potential civil proceedings taken by or against the Australian Government or any joint agency. Where the AGS is the legal services provider for any of the joint agencies, it manages and coordinates those proceedings in line with Project Wickenby strategic objectives.
Attorney-General's Department: manages mutual assistance requests for formal assistance from other jurisdictions on criminal investigations and prosecutions.
What are the key results of Project Wickenby?
Project Wickenby figures are updated each month on the ATO website.
What is the cost of Project Wickenby, and how is the money allocated?
In 2006, the Australian Government provided $308.8 million over seven years to fund the Project Wickenby cross-agency task force.
In 2009, the government increased this funding by an additional $122.1 million to $430.9 million in total:
- Phase 1 - $308.8 million from February 2006 to June 2010, with the period of funding for the CDPP extending to 30 June 2012
- Phase 2 - $122.1 million over four years from 2009 to 2013.
The 2012-13 Budget provided a further $76.8 million for Project Wickenby agencies. The ATO component of this funding ($48 million) will commence in 2013-14 with partner agencies to start receiving funding in 2012-13.
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For more information about the cost of Project Wickenby and how the money is allocated, see Project Wickenby funding.
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Why is there a difference between the assessments raised and the money collected?
The rate of collections compared to actual assessments differs for several reasons. Firstly, because Project Wickenby deals with people hiding assets and income in secrecy havens, recovery of monies located in those jurisdictions can take time. The ATO can issue Departure Prohibition Orders (DPO), preventing people from leaving the country until tax clearance is given. Collection can also be delayed where assets and monies are held through a series of offshore structures that need to be traced through secrecy havens.
A further variation between collections and liabilities raised is that sometimes the available information does not make the ultimate tax position clear. Alternative assessments may be raised - for example, on both a company and the director - although ATO policy is to collect only one liability.
What are the possible consequences for people convicted of offences under Project Wickenby?
Although tax minimisation schemes may appear attractive, people who promote or participate in illegal offshore schemes are running enormous risks - the consequences are severe, and range from civil sanctions and fines through to heavy penalties and significant jail terms.
Why can Project Wickenby court cases take so long to finalise?
The fight against tax evasion, avoidance and crime can be complex and lengthy, but Project Wickenby is working hard to ensure people involved in the abusive use of secrecy havens are held accountable for their actions.
Offshore promoters attempt to design tax evasion schemes that both hide income and avoid the taxation laws of most countries. While some schemes are quite straightforward, others can be extremely complex, which makes detection, investigation and litigation time consuming.
How do Tax Information Exchange Agreements (TIEAs) work?
TIEAs outline the obligation between Australia and the non-OECD participating partner to help each other by exchanging correct tax information relevant to the administration and enforcement of their respective domestic tax laws - civil and criminal. Information may only be provided on request - that is, a jurisdiction is not obliged to provide information it has not been asked for by the other jurisdiction.
TIEAs differ from a comprehensive international tax agreement (also known as tax treaty or double tax agreement) as they do not contain any provisions concerning the allocation of taxing rights over income.
TIEAs also differ from the exchange-of-information article under the traditional international tax agreements in two ways:
- TIEAs are broader than international tax agreements as they cover all taxes administered by the Commissioner of Taxation and criminal and civil tax matters.
- They are narrower than international tax agreements, in that the information exchanged can only relate to a specific investigation occurring at the time - the information-exchange article under international tax agreements allows for specific, spontaneous and automatic exchange of information.
How do people get involved in schemes, and what should they do to protect themselves?
Sometimes individuals can be lured in to these schemes without realising their attempt to minimise their tax obligation is illegal.
Who should you contact if you think you might be caught up in a Wickenby-type scheme or want to provide information about a scheme?
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We are always willing to help taxpayers do the right thing. If you are concerned you may be involved in a suspect scheme and would like to discuss your situation with a tax officer, phone us on 1800 306 377. You can remain anonymous if you prefer.
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Can the ATO provide comment or confirmation on a case?
The tax laws do not permit us to disclose information about the tax affairs of any taxpayer, except in very limited circumstances. These laws prevent us from commenting on individual cases in the media.
Last Modified: Monday, 15 April 2013