Tax Evasion and Tax Crimes: Project Wickenby What's Next?

Thursday 28 May 2015 @ 12.17 p.m. | Corporate & Regulatory | Crime | Taxation

Recently (27 May 2015) the time for submissions on the exposure draft for the Taxation Administration Amendment (Disclosure of Information) Regulation 2015 (Cth), relating to information sharing in serious financial crime closed.
The two key changes proposed by the exposure draft are:

  • to extend the period in which taxation officers can continue to share taxpayer information with other Project Wickenby agencies, or courts and/or tribunals, until 30 June 2017, given that Project Wickenby is to be replaced by the government's Serious Financial Crime Taskforce (SFCT); and
  • to list the the Fraud and Anti-Corruption (FAC) Centre as a prescribed taskforce enabling taxation officers to share taxpayer information with other FAC Centre agencies on an ongoing basis.

Given these proposed changes it might be useful to look back on Project Wickenby and its role in tax law enforcement and at its successor.

About Project Wickenby

According to the Australian Tax Office (the ATO), the Project Wickenby cross-agency task force plays a role in the Australian Government's fight against tax evasion, avoidance and crime.

Project Wickenby was established in 2006 with the job of  ". . . protect[ing] the integrity of Australia's financial and regulatory systems by preventing people from promoting or participating in the abusive use of secrecy jurisdictions (also known as Tax Havens)".

The Project Wickenby task force consists of eight federal agencies, including the ATO, as follows:

  • Australian Transaction Reports and Analysis Centre External;
  • Australian Securities & Investments Commission;
  • Australian Crime Commission;
  • Australian Federal Police;
  • Attorney-General’s Department;
  • Australian Government Solicitor; and
  • Commonwealth Director of Public Prosecutions.

The ATO explains that the cross-agency approach is necessary because Australia is increasingly engaging in the global economy and as a result the scale of international tax avoidance and evasion is both extensive and continuing to grow.

The Key Objectives of Project Wickenby

The Project Wickenby task force is stated to have the following key objectives:

  • the reduction of international tax evasion in the Australian taxation system;
  • enhancing the strategies and capabilities of Australian and international agencies to collectively detect, deter, deal with and disrupt international tax evasion and money laundering;
  • the improvment of community confidence in Australia’s regulatory systems; and
  • the reformation of administrative practice, policy and legislation.

Is Project Wickenby Getting Results

According to the ATO, Project Wickenby is getting results. The ATO is reported in the AFR as saying Project Wickenby has raised $2 billion in liabilities, and brought $850 million worth of revenue back into the tax net since it began in 2006.

The success statistic listed by the ATO in the AFR article are as follows:

  • 74 individuals charged with serious offences;
  • Of the 74 charged, 19 resulted from the Australian Crime Commission investigations and 55 from investigations by the Australian Federal Police; and
  • 45 criminal convictions to date and a further 69 people prosecuted for summary offences (attracting penalties of imprisonment of less than 12 months).

The ATO's view of its success with Project Wickenby is confirmed by a 2012 audit office review which found that Project Wickenby’s focus on preventing the abusive use of secrecy havens had resulted in Australia becoming less attractive for international tax fraud and evasion than it would have otherwise been.

About the FAC Centre

This was an initiative by the Federal Minister for Justice (announced 31 July 2014), wherein the government established the FAC Centre to focus on serious financial crime in Australia. The measures proposed by the exposure draft regulation will list the FAC Centre as a prescribed taskforce and will enable taxation officers to share taxpayer information with other FAC Centre agencies on an ongoing basis, effectively extending the list of agencies listed above to nine.

But wait There's More - Serious Financial Crime Taskforce

Earlier this month, the Federal Treasurer Mr Hockey (on 5 May 2015) announced the establishment of the Serious Financial Crime Taskforce (SFCT) which the Federal government is proposing will tackle tax dodgers, fraudsters and organised criminals. The SFCT it is reported will build on the Project Wickenby tax avoidance investigation, which ends this year, and will also have the broader aim of fighting other serious white collar crimes, like superannuation and investment fraud, and identity offences.

It is reported that the SFCT will be worth $127.6 million in Federal funding over four years for the purpose of investigations and prosecutions and agencies like the ATO, Australian Federal Police, Australian Crime Commission, ASIC and Customs will be involved.

In announcing the SFCT the Treasurer said:

"The taskforce will build on the good work already done by Project Wickenby [and enable] agencies to extend their cooperative work across the broader serious financial crime risk , . ."

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