Global tax chiefs support Puerto Rico’s financial institutions regulator as bank is closed

SAN JUAN, PR — The Joint Chiefs of Global Tax Enforcement (J5) welcomed the decision announced today by Puerto Rico’s financial institutions regulator. The decision to suspend operations of a financial institution in Puerto Rico follows a global effort launched by J5 two years ago.

The Office of the Commissioner of Financial Institutions (OCIF) of Puerto Rico issued a cease and desist order and suspended the operations of Euro Pacific International Bank. The action was welcomed by the J5, which had two years earlier organized a global day of action to end the bank’s alleged facilitation of offshore tax avoidance and money laundering.

Known as Operation Atlantis, Day of Action 2020 was J5’s first major operational activity. During the day of action, each country independently executed enforcement actions consistent with their country’s legal requirements. These actions included intelligence and information gathering, search warrants, interviews, production orders and subpoenas.

The 2020 day of action came as part of a series of international investigations which revealed that a number of clients were using a range of sophisticated structures and international financial institutions to hide their tax situation. These conscious attempts were aimed at evading their tax obligations and/or laundering the proceeds of their crimes.

“There is no doubt that the work of OCIF sends a strong message to others that the Puerto Rican financial sector will not be a haven for tax evaders or illegal behavior. We are here together today to show the strong partnership we have with OCIF and to commend their leadership for taking decisive action,” said Jim Lee, Chief of Criminal Investigations for the Internal Revenue Service. “We are also here with our J5 partners, celebrating four years together this week, showing the world the power of coordination, collaboration and partnerships. The actions announced today are an example of the far-reaching tools available only through our collaboration with partner agencies. The independent actions taken by OCIF today represent a comprehensive compliance effort that J5 leaders pledged to continue in an effort to help bring to justice those who avoid paying taxes or commit other crimes. financial.

The Chiefs explained that while they supported the actions taken by OCIF, the findings were not the result of a joint investigation and OCIF’s decisions were independent of the J5. The J5 did not participate in the OCIF survey but was pleased with the result.

“This announcement made today by OCIF is an important milestone for Operation Atlantis. Four years ago, the J5 embarked on the fight against international tax crimes and money laundering. We are already achieving significant operational results. Our approach also helps drive results on an even broader scale,” said Will Day, ATO Deputy Commissioner and Head of J5. “Ceasing the operations of a financial institution prevents it from being able to facilitate suspected tax evasion and money laundering. This is the strongest warning in the world that offshore tax evasion is being targeted in the J5 efforts.

“When we launched the J5, we were determined to make the world a smaller place for tax evaders. The honest majority can be confident that our approach is working,” said Simon York, Director of Fraud Investigations at HMRC and Head of J5 in the UK. “We have a series of tax investigations, full criminal investigations and intelligence operations already underway and many more to come. Our message is that the game is over for offshore tax evaders and all UK citizens involved with this bank should come and talk to us.

Chief Lee said the J5 continues to work collectively on hundreds of civil and criminal investigations within J5 jurisdictions involving entities and individuals associated with Euro Pacific Bank. These investigations are continuing unaffected by today’s actions.

“The FIOD is very pleased to present the results of our collaborative efforts to combat tax crimes. Investigations began a few years ago on the basis of information collected by the FIOD. In order to maximize the impact on tax evasion and money laundering, this information was then shared with our J5 partners. And then driving to these international results proves how valuable the J5 collaboration is,” said Niels Obbink, Head and Managing Director, Dutch Fiscal Information and Investigation Service (FIOD). “In a recent court case, a suspect was sentenced to several years in prison. This suspect was convicted of several different crimes during which he also used the bank centered on the Atlantis operation for money laundering. Together with the Dutch tax authorities, information from Atlantis is used to stop tax crime. Other investigations against suspects who held accounts with this bank have recently been opened.

Canadian chef Eric Ferron added, “The Canada Revenue Agency is proud to have brought its expertise and best practices to help in this important action. Operation Atlantis exemplifies the greater reach of our nations when working as a team to combat not only tax crime, but also money laundering and cybercrime. I look forward to our continued collaboration.

“The actions we have taken today in the Euro-Pacific case are fully consistent with our duty as regulator, in accordance with OCIF laws and regulations, to protect against irreparable harm the interests of the entity and/or persons or entities that hold funds or assets of the institution and, ultimately, also protect the soundness and reputation of Puerto Rico’s financial system,” said OCIF Commissioner Natalia Zequeira Diaz. “While OCIF has ensured the entity’s legality under law and regulation, including giving it multiple opportunities to take corrective action, unfortunately Euro Pacific has a long history non-compliance with the law and regulations that govern the Puerto Rico International Financial Center OCIF will not permit or tolerate any financial entity licensed by the government of Puerto Rico to operate outside of the law or disregard the clear mandates of applicable laws and regulations.

Formed in 2018, the J5 works together to gather information, share intelligence and conduct coordinated operations against transnational financial crimes. The J5 includes the Australian Taxation Office, Canada Revenue Agency, Dutch Fiscal Information and Investigation Service, UK Her Majesty’s Revenue and Customs and US IRS Criminal Investigation.

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