AUSTRAC, Australia's financial intelligence unit, plays a pivotal role in the detection and investigation of tax haven abuse.
AUSTRAC is a primary source of data for identifying people who may be engaged in tax evasion using tax havens.
AUSTRAC obtains this data through financial transaction reports that banks, non-banking financial services, remittance (money transfer) services, bullion dealers and gambling businesses are required to submit under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Some of these businesses also report such financial data under the Financial Transaction Reports Act 1988.
Both Acts obligate these businesses to report international funds transfers into and out of Australia. This information is extremely useful for identifying tax haven arrangements, as information on both the customer and beneficiary of the exchange is captured by AUSTRAC's system.
AUSTRAC Chief Executive Officer John Schmidt said AUSTRAC receives almost 15 million reports every year.
'We use manual, automated and data-mining techniques to analyse anomalous activity. Key agencies, including the Tax Office, also have online access to the AUSTRAC database to search for suspect activity,' he said.
AUSTRAC and the Tax Office have a strong collaborative relationship. AUSTRAC's financial intelligence on tax haven countries supports numerous Tax Office initiatives, including monthly tax haven risk analysis and country reports.
AUSTRAC data has played an important role in Project Wickenby investigations.
'This work enables us to develop profiles detailing the use of complex corporate structures to hide true beneficial ownership behind funds transfers to havens, as well as the misuse of off-shore debit and credit card facilities,' Mr Schmidt said.
The value of this inter-agency collaboration is significant. In 2008-09, AUSTRAC information contributed directly to 1,193 Tax Office investigations, leading to tax assessments of $131.1 million. This represents a considerable increase over the 440 cases and $76 million in tax assessments to which AUSTRAC contributed in 2007-08.
A good example of this collaboration is the Tax Office's Offshore Voluntary Disclosure Initiative which, with the assistance of AUSTRAC information, raised $28.7 million in tax assessments during 2008-09.
Mr John Schmidt was appointed Chief Executive Officer of AUSTRAC for a five-year term from 17 September 2009.
He previously held senior roles in the NSW Department of Premier and Cabinet and the NSW Cabinet Office.
From 1982 to 1991, Mr Schmidt worked extensively in taxation, firstly with the Tax Office and later in the private sector.