International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Saturday, September 26, 2020

U.S. Taxpayer in Panama Papers Investigation Sentenced to 4 years in Prison

A former U.S. resident and taxpayer was sentenced in the Southern District of New York to four years in prison for wire fraud, tax fraud, money laundering, false statements, and other charges. 

Harald Joachim von der Goltz, aka H.J von der Goltz, Johan von der Goltz, Jochen von der Goltz, Tica, and Tika, 83, of Needham, Massachusetts, and Key Biscayne, Florida, pleaded guilty to one count of conspiracy to commit tax evasion; one count of wire fraud; one count of money laundering conspiracy; four counts of willful failure to file Reports of Foreign Bank and Financial Accounts, FinCEN Reports 114; and two counts of false statements before U.S. District Judge Richard M. Berman.  In addition to the prison term, Judge Berman ordered von der Goltz to serve three years of supervised release, to pay forfeiture in the amount of $5,373,609 and restitution in the amount of $3,448,848, and to pay a fine in the amount of $30,000.

Von der Goltz was charged along with Ramses Owens, Dirk Brauer, and Richard Gaffey, aka Dick Gaffey, in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities.  Von der Goltz previously pleaded guilty to the charges, and was sentenced today by U.S. District Judge Richard M. Berman.

“Harald Joachim von der Goltz sought to conceal his considerable wealth through a sham foreign foundation and various shell companies.  But his decades-long scheme to evade his tax obligations and defraud the U.S. government came to an end today thanks to the tireless efforts of U.S. law enforcement,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “No matter how complicated the scheme, the U.S. government will bring to justice those who attempt to evade their tax obligations under the law.   In particular, I would like to recognize the outstanding work of the Internal Revenue Service in this case.”

“Harald Joachim von der Goltz, a one-time U.S. resident, previously admitted to an elaborate scheme to evade millions in taxes owed to the IRS,” said Acting U.S. Attorney Audrey Strauss of the Southern District of New York.  “Von der Goltz was abetted by the specialized criminal services of the law firm Mossack Fonseca to conceal income and assets in shell companies and off-shore bank accounts.  Now von der Goltz has been sentenced to four years in federal prison for his conduct.”

According to the allegations contained in the indictments, other filings in this case, and statements during court proceedings, including von der Goltz’s guilty plea and sentencing hearings:

Since at least 2000 through 2017, von der Goltz conspired with others to conceal his assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means.  During all relevant times, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.  Nevertheless, von der Goltz evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS.  These shell companies and bank accounts made investments totaling tens of millions of dollars. 

Von der Goltz was assisted in this scheme through the use of Mossack Fonseca, including Owens, a Panamanian lawyer who previously worked at Mossack Fonseca, and by Gaffey, a partner at a U.S.-based accounting firm.  Specifically, in furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, von der Goltz engaged the services of Mossack Fonseca, including Owens, to create a sham foundation and shell companies formed under the laws of Panama and the British Virgin Islands to conceal from the IRS and others the ownership by von der Goltz of accounts established at overseas banks, as well as the income generated in those accounts.  Von der Goltz, Gaffey, and Owens also falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike von der Goltz – was not a U.S. taxpayer. 

Gaffey previously pled guilty and is scheduled to be sentenced by Judge Berman on Sept. 24, 2020, at 10:30 a.m. EDT.  Owens and Brauer remain at large. 

The Justice Department praised the outstanding investigative work of IRS-Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and thanked the Justice Department’s Tax Division and the FBI for their significant assistance in the investigation.  The Justice Department’s Office of International Affairs and law enforcement partners in France, the United Kingdom, and Germany provided significant assistance.                                             

This case is being prosecuted by Trial Attorney Michael Parker of the Criminal Division’s Money Laundering and Asset Recovery Section of the Justice Department and Assistant U.S. Attorneys Eun Young Choi and Thane Rehn of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, with substantial support from previous co-counsel, Trial Attorney Parker Tobin of the Tax Division. 

September 26, 2020 in AML | Permalink | Comments (0)

Friday, September 25, 2020

Oil Trader Indicted in International Bribery and Money Laundering Conspiracy Involving Corrupt Payments to Ecuadorian Officials

A federal grand jury in the Eastern District of New York returned an indictment 22 Sept 2020 against a trader at the U.S. subsidiary of a multinational oil distributor and trading company (Trading Company), for his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials. 

Acting Attorney General Brian C. Rabbitt, Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

The two-count indictment charges Javier Aguilar, 46, a citizen of Mexico and resident of the United States, with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit money laundering. 

As alleged in court documents, including the criminal complaint that was unsealed today, between approximately 2015 and July 2020, Aguilar and others participated in a conspiracy to pay and conceal bribes to then-Ecuadorian officials, including at Empresa Publica de Hidrocarburos del Ecuador (Petroecuador) in order to obtain and retain business for Trading Company, in particular, a $300 million contract to purchase fuel oil that was awarded to a state-owned entity for the benefit of Trading Company.   

To promote the bribery scheme and conceal its proceeds, Aguilar and his co-conspirators allegedly agreed to use sham consulting agreements between bribe paying intermediaries and offshore shell companies, into whose accounts Trading Company paid funds while knowing that they would be used to pay bribes to the Ecuadorian government officials. 

According to the allegations, during the scheme, Aguilar and his co-conspirators caused the payment of approximately $870,000 in bribes that they had promised to then-Ecuadorian officials on behalf of Trading Company.

September 25, 2020 in AML | Permalink | Comments (0)

Thursday, September 24, 2020

U.S. Accountant in Panama Papers Investigation Sentenced to Prison

A U.S. accountant was sentenced in the Southern District of New York to 39 months in prison for wire fraud, tax fraud, money laundering, aggravated identity theft, and other charges, announced Acting Assistant Attorney General Brian C. Rabbitt and Acting U.S. Attorney Audrey Strauss of the Southern District of New York. 

Richard Gaffey, aka Dick Gaffey, 76, a U.S. citizen and resident of Medfield, Massachusetts, pleaded guilty to one count of conspiracy to commit tax evasion and to defraud the United States; one count of wire fraud; one count of money laundering conspiracy; four counts of willful failure to file Reports of Foreign Bank and Financial Accounts, FinCEN Reports 114; and one count of aggravated identity theft.  In addition to 39 months’ imprisonment, U.S. District Judge Richard M. Berman ordered Gaffey to serve three years of supervised release, to pay forfeiture in the amount of a sum of $5,373,609 and restitution in the amount of $3,459,315, and to pay a fine in the amount of $ 25,000.

Gaffey was charged along with Harald Joachim von der Goltz, Ramses Owens, and Dirk Brauer in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panama-based global law firm, and its related entities.  Gaffey previously pled guilty to the charges, and was sentenced today by U.S. District Judge Richard M. Berman.

According to the allegations contained in the indictments, other filings in this case, and statements during court proceedings, including Gaffey’s guilty plea and sentencing hearings:

Since at least 2000 through 2018, Gaffey conspired with others to defraud the United States by concealing his clients’ assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means.  During all relevant times, Gaffey assisted U.S. taxpayers who were required to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts. 

Gaffey helped those U.S. taxpayers evade their tax reporting obligations in a variety of ways, including by hiding the beneficial ownership of his clients’ offshore shell companies and setting up bank accounts for those shell companies.  These shell companies and bank accounts made investments totaling tens of millions of dollars.  For one U.S. taxpayer, Gaffey advised how to covertly repatriate approximately $3 million to the United States by reporting to the IRS a fictitious company sale that never actually occurred to evade paying the full U.S. tax amount.  Gaffey was assisted in this scheme through the use of Mossack Fonseca, including Ramses Owens, a Panamanian lawyer who previously worked at Mossack Fonseca.

Gaffey was the U.S. accountant for Harald Joachim von der Goltz.  From 2000 until 2017, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income.  In furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, Gaffey falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike von der Goltz – was not a U.S. taxpayer.  In support of this fraudulent scheme, Gaffey submitted the name, date of birth, government passport number, address, and other means of identification of von der Goltz’s elderly mother to a U.S. bank in Manhattan.

Von der Goltz was previously sentenced by Judge Berman principally to 48 months’ imprisonment.  Owens and Brauer remain at large. 

The Justice Department praised the outstanding investigative work of IRS-Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The Justice Department’s Tax Division and Office of International Affairs, the FBI, and law enforcement partners in France, the United Kingdom, and Germany provided significant assistance.

This case is being prosecuted by Trial Attorney Michael Parker of the Criminal Division’s Money Laundering and Asset Recovery Section of the Justice Department and Assistant U.S. Attorneys Eun Young Choi and Thane Rehn of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, with substantial support from previous co-counsel, Trial Attorney Parker Tobin of the Tax Division.

September 24, 2020 in AML | Permalink | Comments (0)

Sargeant Marine Inc. Pleads Guilty and Agrees to Pay $16.6 Million to Resolve Charges Related to Foreign Bribery Schemes in Brazil, Venezuela, and Ecuador

Sargeant Marine Inc., an asphalt company formerly based in Boca Raton, Florida, pleaded guilty Sept 22, 2020, to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a criminal fine of $16.6 million to resolve charges stemming from a scheme to pay bribes to foreign officials in three South American countries. 

According to its admissions, between 2010 and 2018, the company paid millions of dollars in bribes to foreign officials in Brazil, Venezuela, and Ecuador to obtain contracts to purchase or sell asphalt to the countries’ state-owned and state-controlled oil companies, in violation of the FCPA. 

“With today’s guilty plea, Sargeant Marine has admitted to engaging in a long-running pattern of paying bribes to corrupt officials in three South American countries to obtain lucrative business,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Today’s resolution, together with charges the department has brought against individuals involved in Sargeant Marine’s illegal schemes, demonstrates the department’s continuing commitment to holding companies and their executives responsible for international corruption.” 

“Today’s resolution is the result of a multi-year, multi-national, collaborative effort to root out corruption perpetrated by an American company in three countries,” said Acting U.S. Attorney Seth DuCharme of the Eastern District of New York.  “We will continue to investigate and prosecute any company that corrupts foreign government officials in order to gain a competitive edge, as well as any of their executives and employees who participate in those efforts.”

“The FBI is dedicated to rooting corruption out of our market, keeping the United States fair for vendors and consumers alike,” said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division. “Sargeant Marine Inc. attempted to get ahead of competitors by paying bribes to foreign officials in violation of the Foreign Corrupt Practices Act.  As today's guilty pleas demonstrate, the FBI will relentlessly investigate those attempting to cheat the market, and we will bring them to justice.”

According to the company’s admissions, Sargeant Marine Inc. and its affiliated companies (Sargeant Marine) engaged in an eight-year scheme to bribe foreign officials in Brazil, Venezuela, and Ecuador.  In Brazil, Sargeant Marine admitted to bribing a Minister in the Brazilian government, a high-ranking member of the Brazilian Congress, and senior executives at Petróleo Brasileiro S.A.-Petrobras to obtain valuable contracts to sell asphalt.  To execute the scheme and conceal the bribe payments, Sargeant Marine entered into fake consulting agreements with bribe intermediaries.  After receiving fake invoices, it then sent international wires from Sargeant Marine bank accounts to offshore bank accounts held in the names of shell companies controlled by the bribe intermediaries.  The bribe intermediaries used a portion of the commissions to pay bribes to Brazilian government officials on Sargeant Marine’s behalf, either by wire to the officials’ offshore shell companies, or in cash in Brazil.

Sargeant Marine also admitted that between approximately 2012 and 2018, it bribed four Petróleos de Venezuela, S.A. (PDVSA) officials in Venezuela in exchange for inside information, and for their assistance in steering contracts to purchase asphalt from PDVSA to a Sargeant Marine nominee.  The Sargeant Marine co-conspirators used code names to hide the identities of some of the PDVSA officials receiving the bribes, referring to them simply as “Oiltrader,” “Tony,” and “Tony 2” in emails and texts.  The inside information was called “Chocolates.”  Similar to Brazil, Sargeant Marine covered up the bribes by entering into fake consulting agreements with a bribe intermediary and wiring commission payments into U.S. and offshore bank accounts he controlled.  The bribe intermediary then paid the PDVSA officials on behalf of Sargeant Marine.  

Sargeant Marine also admitted that it bribed an official at Ecuador’s state-owned oil company EP Petroecuador (Petroecuador) to secure a 2014 contract to supply asphalt.  The company used the same tactics as in Brazil and Venezuela to conceal the bribe payments.  In particular, it engaged a bribe intermediary with close ties to a decisionmaker at Petroecuador and then paid commissions to the bribe intermediary pursuant to a sham consulting agreement.  The intermediary used the commission payments to pay the bribes to the Petroecuador official on Sargeant Marine’s behalf.

The department recently unsealed charges against, and the guilty pleas of, five of the individuals who played a major role in the bribery scheme, including Daniel Sargeant, a senior executive of the company; Jose Tomas Meneses, a Sargeant Marine trader; Luiz Eduardo Andrade and David Diaz, consultants who acted as bribe intermediaries in Brazil and Venezuela, respectively; and Hector Nuñez Troyano, a former PDVSA official who received bribes in connection with the Venezuela contracts.  A sixth individual, Roberto Finocchi, also a Sargeant Marine trader, pleaded guilty in November 2017 for his role in the Brazil scheme. 

On Sept. 10, 2020, a criminal complaint was unsealed in federal court in Brooklyn charging another former PDVSA official with conspiracy to commit money laundering, in part, for his alleged role in the Sargeant Marine Venezuela scheme.

The investigation is being conducted by the FBI’s International Corruption Unit.  The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Fraud Section Trial Attorney Derek J. Ettinger and Assistant U.S. Attorneys Whitman Knapp, Mark E. Bini, and Andrey Spektor are prosecuting the case. 

The Justice Department’s Office of International Affairs provided substantial assistance.  The Ministerio Publico Federal in Brazil provided significant cooperation. 

September 24, 2020 in AML | Permalink | Comments (0)

Wednesday, September 23, 2020

U.S. International Transactions: Current Account Deficit Widens by 52.9 Percent in Second Quarter

 

Current Account Balance, Second Quarter

The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $59.0 billion, or 52.9 percent, to $170.5 billion in the second quarter of 2020, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was $111.5 billion.

The second quarter deficit was 3.5 percent of current dollar gross domestic product, up from 2.1 percent in the first quarter.

The $59.0 billion widening of the current account deficit in the second quarter mostly reflected an expanded deficit on goods and reduced surpluses on primary income and on services.

Quarterly U.S. Current Account and Component Balances
Coronavirus (COVID-19) Impact on Second Quarter 2020 International Transactions
All major categories of current account transactions declined in the second quarter of 2020 resulting in part from the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. In the financial account, the ending of some currency swaps between the U.S. Federal Reserve System and some central banks in Europe and Japan contributed to U.S. withdrawal of deposit assets and U.S. repayment of deposit liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified. For more information on the impact of COVID-19 on the statistics, see the technical note that accompanies this release.

Current Account Transactions

Exports of goods and services to, and income received from, foreign residents decreased $209.3 billion, to $688.0 billion, in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $150.2 billion, to $858.5 billion.

Quarterly U.S. Current Account Transactions

Trade in Goods 

Exports of goods decreased $114.6 billion, to $288.9 billion, mostly reflecting decreases in industrial supplies and materials, mainly petroleum and products; in capital goods, mainly civilian aircraft, engines, and parts; and in automotive vehicles, parts, and engines, mainly parts and engines and passenger cars. Imports of goods decreased $87.1 billion, to $508.2 billion, mostly reflecting decreases in automotive vehicles, parts, and engines, mainly parts and engines and passenger cars, and in industrial supplies and materials, mostly petroleum and products.

Trade in Services 

Exports of services decreased $46.3 billion, to $155.8 billion, and imports of services decreased $35.4 billion, to $101.3 billion. The decreases in both exports and imports mostly reflected decreases in travel, primarily other personal travel, and in transport, primarily air passenger transport.

Primary Income 

Receipts of primary income decreased $47.1 billion, to $209.4 billion, mostly reflecting decreases in portfolio investment income, primarily income on equity securities, and in direct investment income, primarily earnings. Payments of primary income decreased $24.3 billion, to $180.2 billion, reflecting decreases in all components, led by other investment income, primarily interest on loans and deposits.

Secondary Income

Receipts of secondary income decreased $1.2 billion, to $33.9 billion, mostly reflecting a decrease in private transfers, primarily private sector fines and penalties. Payments of secondary income decreased $3.4 billion, to $68.8 billion, reflecting decreases in private transfers, primarily private sector fines and penalties, and in general government transfers, primarily international cooperation.

Capital Account Transactions 

Capital transfer payments decreased $1.9 billion, to $1.1 billion, in the second quarter, mostly reflecting a decrease in investment grants.

Financial Account Transactions 

Net financial account transactions were −$82.6 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Financial Assets 

Second quarter transactions decreased U.S. residents’ foreign financial assets by $147.6 billion. Transactions decreased portfolio investment assets by $29.8 billion, primarily equity securities, and other investment assets, mostly deposits, by $158.6 billion. Transactions in deposits included a net withdrawal by the U.S. Federal Reserve of $130.8 billion from deposits abroad. Transactions increased direct investment assets, primarily equity, by $35.9 billion, and reserve assets by $5.0 billion.

Liabilities 

Second quarter transactions decreased U.S. liabilities to foreign residents by $4.8 billion. Transactions decreased direct investment liabilities, mainly debt instruments, by $8.5 billion and other investment liabilities, mostly deposits, by $335.2 billion. Foreign banks withdrew $213.0 billion of their deposits in U.S. banks. Transactions increased portfolio investment liabilities, mainly short-term U.S. Treasury securities, by $339.0 billion.

Financial Derivatives 

Net transactions in financial derivatives were $60.3 billion in the second quarter, reflecting net lending to foreign residents.

Updates to First Quarter 2020 International Transactions Accounts Balances

Billions of dollars, seasonally adjusted
  Preliminary estimate Revised estimate
Current account balance -104.2 −111.5
    Goods balance −192.3 −191.7
    Services balance 73.3 65.3
    Primary income balance 52.5 52.0
    Secondary income balance −37.6 −37.1
Net financial account transactions −201.1 −143.1

*  *  *

Next release: December 18, 2020 at 8:30 A.M. EST

September 23, 2020 in Economics | Permalink | Comments (0)

Tuesday, September 15, 2020

New York Brothers Charged With COVID-Relief Fraud

Two New York brothers were charged in a criminal complaint unsealed for their alleged participation in a scheme to file fraudulent loan applications seeking nearly $7 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney James P. Kennedy, Jr. of the U.S. Attorney’s Office for the Western District of New York.

Larry Jordan, 42, Lancaster, New York, and Sutukh El, aka Curtis Jordan and Hugo Hurt, 38, of Buffalo, New York, were charged in a complaint filed in the Western District of New York with wire fraud conspiracy.  Both individuals were arrested this morning and are scheduled to appear today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. in the Western District of New York.

The complaint alleges that Jordan and El conspired to, and did, submit at least eight fraudulent loan applications in an attempt to obtain nearly $7 million.  The complaint also alleges that, in support of the fraudulent loan applications, Jordan and El made numerous false and misleading statements about the companies’ respective business operations and payroll expenses.

The complaint further alleges that the fraudulent loan applications were supported by fake documents, including falsified federal tax filings.  For example, included in one application for 5 Stems Inc was a fraudulent IRS filing that appeared to be the company’s 2019 federal unemployment tax return showing that the company paid nearly $3.3 million in employee wages that year.  In reality, the IRS has no record of such a filing.  

The complaint further alleges that Jordan and El used fraudulently obtained loan proceeds on what appear to be personal expenses, including the purchase of securities, home improvements, and a vehicle.  To date, the government has seized more than $400,000 of the more than $600,000 that Jordan and El obtained in their alleged fraud. 

September 15, 2020 in AML | Permalink | Comments (0)

Monday, September 14, 2020

Seven Charged in Connection with a $2.1 Million Money Laundering Scheme that Involved Money from the Paycheck Protection Program

Seven individuals were charged in an indictment in the District of South Carolina with laundering over $750,000 of fraudulently obtained funds, including over $390,000 obtained from a fraudulent Paycheck Protection Program (PPP) loan. The seven individuals used a variety of methods to launder the money, including laundering the money through a casino. The indictment also identifies over $2.1 million in funds from twelve different bank accounts allegedly associated with the fraud scheme as subject to forfeiture which agents seized.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division; U.S. Attorney Peter M. McCoy Jr. of the District of South Carolina; Special Agent in Charge Jody Norris of the FBI’s Columbia Field Office; Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division, and Special Agent in Charge Kevin Kupperbusch of the Small Business Administration Office of Inspector General (SBA OIG) Eastern Region made the announcement.

Lauren Marcel Duhart, 34 of Stonecrest, Georgia, Joshua Bernard Smith, 39 of McDonough, Georgia, Steve Ronald Lewis, 43 of Snellville, Georgia, Christopher J. Agard, 41 of Marietta, Georgia, Henry Duffield, 58 of Belton, South Carolina, Jeremy Brandon Latourneau, 43 of Spartanburg, South Carolina, and Derick Keane, 43 of Spartanburg, South Carolina, were charged in an indictment filed in the District of South Carolina with conspiracy to commit wire fraud and conspiracy to commit money laundering. Duhart, Smith, and Agard were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Kevin F. McDonald of the District of South Carolina. 

In May 2020, Agard submitted a fraudulent PPP loan application for his business, Wild Stylz Entertainment, LLC,  to a financial institution.  In support of the application, Agard submitted fraudulent supporting documents that made numerous false and misleading statements about Wild Stylz’s number of employees and payroll expenses.  The financial institution approved and funded a loan of over $395,000.  Agard disseminated the fraudulently obtained funds to other members of the conspiracy to conceal the true nature of their fraudulently obtained funds.  On May 27, 2020, Agard made $200,000 counter withdrawal at a bank branch.  On May 28, 2020, Agard withdrew $50,000 in cash and made a $96,000 counter withdrawal.  In June 2020, Duhart, Smith, and Lewis requested that Hunt provide Duhart, Smith, and Lewis with bank accounts in which to deposit fraudulently obtained PPP funds.  Hunt had previously participated in drug trafficking and financial fraud with two South Carolina business owners. The two South Carolina business owners agreed to let Lewis use their business bank accounts in return for a percentage of the fraudulent funds deposited in their account. Hunt provided the two South Carolina business owner’s banking information and additional account access information to Lewis.  During multiple recorded calls in early June 2020 Duhart, Lewis, Smith, and Hunt discussed the bank and wire fraud conspiracies. In one call, Lewis informed Hunt that the scheme involved fraudulent bank applications and that they needed to submit as many applications to the bank as possible by June 30th.

The indictment alleges that Agard also utilized his business, Wild Stylz, to launder the proceeds of other fraud schemes.  In October of 2019, Lewis recruited Duffield to participate in a fraud scheme.  As part of the scheme, Duffield allowed Agard to transfer $378,000 of fraud proceeds from the Wild Stylz business account to be deposited into Duffield’s business account in return for a portion of the proceeds. After the proceeds were deposited, Roosevelt Hunt (who has pled guilty to related charges), Latourneau, and Keane withdrew the funds from Duffield’s account by depositing checks totaling $200,000 at a casino. After gambling for less than two hours, Hunt, Keane, and Latourneau cashed out from the casino and left with approximately $198,750 in cash. Lewis met with Hunt to retrieve the cash which had been withdrawn from Duffield’s account. Lewis delivered a portion of the cash he picked up from Hunt to Duhart. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

September 14, 2020 in AML | Permalink | Comments (0)

Friday, September 11, 2020

NFL Player Charged for Role in $24 Million COVID-Relief Fraud Scheme

A National Football League (NFL) player has been charged for his alleged participation in a scheme to file fraudulent loan applications seeking more than $24 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge Michael J. De Palma of the IRS-Criminal Investigation (CI) Miami Field Office, Special Agent in Charge George L. Piro of FBI’s Miami Field Office, and Special Agent in Charge Kevin A. Kupperbusch of the U.S. SBA-Office of Inspector General (OIG), Investigations Division, Eastern Regional Office, made the announcement.

Joshua J. Bellamy, 31, of St. Petersburg, Florida, a player in the NFL, was charged in a federal criminal complaint filed in the Southern District of Florida with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud.  Bellamy was arrested this morning and will appear today before U.S. Magistrate Judge Christopher Tuite of the Middle District of Florida.

The complaint alleges that Bellamy conspired with others to obtain millions of dollars in fraudulent PPP loans.  Early in the scheme, Phillip J. Augustin allegedly obtained a fraudulent PPP loan for his talent management company using falsified documents.  After submitting that application, Augustin then began to work with other co-conspirators, including Bellamy, on a scheme to submit numerous fraudulent PPP loan applications for confederate loan applicants, in order to receive kickbacks for obtaining the forgivable loans for them. 

Bellamy is alleged to have obtained a PPP loan of $1,246,565 for his own company, Drip Entertainment LLC.  Bellamy allegedly purchased over $104,000 in luxury goods using proceeds of his PPP loan, including purchases at Dior, Gucci, and jewelers.  He is also alleged to have spent approximately $62,774 in PPP loan proceeds at the Seminole Hard Rock Hotel and Casino, and to have withdrawn over $302,000.  Bellamy also allegedly sought PPP loans on behalf of his family members and close associates.

The complaint alleges that the scheme involved the preparation of at least 90 fraudulent applications, most of which were submitted.  Augustin, Bellamy, and other conspirators in the scheme are alleged to have applied for PPP loans that are together worth more than $24 million dollars.  Many of those loan applications were approved and funded by financial institutions, paying out at least $17.4 million.

The other 10 defendants allegedly involved in this scheme whose complaints were previously unsealed are the following:

  • Tiara Walker, 37, of Miami Gardens, Florida, was charged in a federal criminal complaint filed on Sept. 3, 2020, in the Southern District of Florida, with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud; 
     
  • Damion O. Mckenzie, 38, of Miami Gardens, Florida, was charged in a federal criminal complaint filed on Aug. 3, 2020, in the Southern District of Florida with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • Andre M. Clark, 46, of Miramar, Florida, was charged in a federal criminal complaint filed on Aug. 3, 2020, in the Southern District of Florida with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • Keyaira Bostic, 31, of Pembroke Pines, Florida, was charged in a federal criminal complaint filed on Aug. 3, 2020, in the Southern District of Florida with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • Phillip J. Augustin, 51, of Coral Springs, Florida, was charged in a federal criminal complaint filed on July 28, 2020, in the Northern District of Ohio with wire fraud, bank fraud, conspiracy to commit wire fraud and bank fraud, and obstruction;
     
  • Wyleia Nashon Williams, 44, of Ft. Lauderdale, Florida, was charged in a federal criminal complaint filed on July 28, 2020, in the Northern District of Ohio with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • James R. Stote, 54, of Hollywood, Florida, was charged in a federal criminal complaint filed on June 24, 2020, in the Northern District of Ohio with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • Ross Charno, 46, of Ft. Lauderdale, Florida, was charged in a federal criminal complaint filed on June 24, 2020, in the Northern District of Ohio with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
     
  • Deon D. Levy, 50, of Bedford, Ohio, was charged in a federal complaint filed on June 8, 2020, in the Northern District of Ohio with wire fraud and conspiracy to commit wire fraud; and
     
  • Abdul-Azeem Levy, 22, of Cleveland, Ohio was charged in a federal complaint filed on June 8, 2020, in the Northern District of Ohio with wire fraud and conspiracy to commit wire fraud.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses. 

September 11, 2020 in AML | Permalink | Comments (0)

Thursday, September 10, 2020

Head of Capacity Development Unit / Senior Economic Affairs Officer (P5 level) – applications welcome through 18 October 2020

On behalf of Ms. Caroline Lombardo, We have a job opening for Senior Economic Affairs Officer in the Financing for Sustainable Development Office (FSDO) of UNDESA.

The Senior Economic Affairs Officer will serve as head of FSDO's Capacity Development Unit in the International Tax and Development Cooperaiton Branch. 

The Branch carries out DESA's capacity development programme on tax and other financing for development matters and serves as Secretariat to both the United Nations Committee of Experts on International Cooperation in Tax Matters and the Development Cooperation Forum. More information can be found at: https://www.un.org/development/desa/financing/

Among other duties, the Senior Economic Affairs Officer will lead the development, and support implementation, of a coherent strategy for capacity development programmes and activities, both in-person and virtual, at national, regional and global levels in the area of Financing for Sustainable Development, including to support an integrated approach to policy and capacity development work in the area of international tax cooperation.

A copy of the Job Opening is attached. The link to apply is here. Please note that the deadline to apply for this position is 18 October 2020.

I would be most grateful if you could circulate the job opening widely within your networks. 

Thank you very much for your cooperation and best regards,

Caroline Lombardo | Chief
International Tax and Development Cooperation Branch

Financing for Sustainable Development Office
United Nations Department of Economic and Social Affairs | Room DC2-1758

Email: lombardoc@un.org | Tel: +1 917 367 9212 www.un.org/esa/ffd

...

September 10, 2020 in World Bank | Permalink | Comments (0)

Wednesday, September 9, 2020

Global Forum reveals compliance ratings from new peer review assessments for Anguilla, Chile, China, Gibraltar, Greece, Korea, Malta, Papua New Guinea and Uruguay

The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) published today nine new peer review reports assessing compliance with the international standard on transparency and exchange of information on request (EOIR).

Despite the significant disruption caused by the COVID-19 pandemic over the past few months and the necessity to hold all meetings virtually, the Global Forum Secretariat and the Peer Review Group still managed to complete work in a timely manner for this latest set of reports. In all, 80 second round peer review reports have now been published since 2017.

The new reports relate to jurisdictions with very diverse EOIR practice and their findings are equally contrasted. Papua New Guinea, undergoing its first full peer review, was rated Largely Compliant, as were Chile, China, Gibraltar, Greece, Korea and Uruguay. Malta was issued a Partially Compliant rating and Anguilla was deemed Non-Compliant. Key findings and recommendations include:

  The revision of Anguilla’s rating from Partially Compliant to Non-Compliant was primarily due to two major deficiencies, namely concerning the practical implementation of rules requiring the availability of accounting records and significant failures by the authorities to respond to information requests from peers. The latter stems from organisational malfunction and the abrupt closure of service providers related to the 2016 leaks case involving the law firm and corporate service provider Mossack Fonseca. Read the report


  Chile’s Largely Compliant rating comes with recommendations regarding the scope of its legislation on beneficial ownership: while Chilean banks are required to identify the beneficial owner of their clients since 2016, this obligation does not cover all relevant entities and the definition of beneficial owners for legal entities and arrangements is not fully in line with the international standard. The expansion of Chile’s EOI network to 137 jurisdictions yielded a total of 61 requests received and 28 requests sent during the period under review. Peers were generally satisfied and reported a good quality of responses. Read the report

  China was attributed a Largely Compliant rating, after being found Compliant in the last review. Chinese tax authorities answered several hundred requests from partners during the period under review and their practices were confirmed to be consistent with the international standard. The main challenges relate to the availability of beneficial ownership information on companies and other relevant entities and arrangements, a new requirement in the ongoing second round of EOIR peer reviews. The supervision of financial institutions, which are primarily relied on to keep this information, is not fully commensurate to the circumstances and should be enhanced. Read the report

  Gibraltar was rated Largely Compliant overall. Its legal framework and EOI practices were generally in line with the standard. Some improvements to ensure the availability of beneficial ownership information and increased supervision in respect of accounting information will nevertheless be necessary. While Gibraltar successfully responded to the vast majority of requests from its exchange partners, there is scope for improvement in the exercise of enforcement powers in accessing information and interpreting the relevance of requested information in line with the standard, to ensure timely and effective exchanges in all cases. Read the report

  Greece’s latest peer review resulted in a Largely Compliant rating. It has made a number of improvements since the previous review in 2013, including by abolishing the issuance of bearer shares by most companies and by establishing a beneficial owner’s register. However, deficiencies in the availability of ownership and accounting information were identified, in particular for shipping companies. The practical exchange of information on request is also still hindered by some delays. Read the report

  Korea was rated Largely Compliant in this second round assessment, after being deemed Compliant in the last review. The country’s legal and regulatory framework is largely in line with the standard. Korea received almost double the number of requests compared to the last review and EOI practices have been confirmed to be consistent with the international standard. Some improvements are needed in regard to the availability of beneficial ownership information. Korea should also ensure that ownership and accounting information for inactive companies is available. Read the report

  Malta’s new peer review resulted in an overall Partially Compliant rating, whereas the first round report had concluded the jurisdiction’s EOIR practice to be Largely Compliant with the standard. The main concerns identified refer to the effectiveness of enforcement and supervision activities to ensure the availability of ownership, accounting and banking information, particularly considering the filing compliance rates. Malta also had large number of inactive companies registered during the review period, which caused delays or failures to provide information to its main EOI partners. The new report thus includes recommendations to enhance enforcement, supervision and monitoring activities in order to reduce and limit the number of inactive companies. Read the report

  Papua New Guinea, which joined the Global Forum in 2015, received a Largely Compliant rating in its first full review. From setting up a functional EOI unit to putting in place the necessary procedures and processes for effective exchanges of information, efforts have been evident. However, improvements in monitoring and supervision of the laws on availability of ownership and accounting information are necessary. Further, while Papua New Guinea is committed to signing the Convention on Mutual Administrative Assistance in Tax Matters, it should take proactive steps to expand its existing treaty network and ensure that all its exchange mechanisms are fully in line with the standard. Read the report

  Uruguay maintained its first round Largely Compliant rating. It has made significant progress since the previous review, including in ensuring that beneficial ownership information of entities is available, and becoming a party to the Multilateral Convention on Mutual Administrative Assistance on Tax Matters. It should now ensure that banking information is accessible in all cases and in a timely manner. Read the report

September 9, 2020 in GATCA | Permalink | Comments (0)

Tuesday, September 8, 2020

Treasury Announces MOU with the State of Delaware to Strengthen Information Sharing

The U.S. Department of the Treasury and the State of Delaware announced a Memorandum of Understanding (MOU) setting forth information sharing procedures between the Office of Foreign Assets Control (OFAC) and the State of Delaware Department of Justice. 

This MOU is intended to:

  • Promote the sharing of certain U.S. economic sanctions-related information between OFAC and the Delaware Department of Justice, and facilitate coordinated investigations;
  • Foster cooperative efforts between OFAC and the State of Delaware to heighten awareness of U.S. economic sanctions within both the Delaware business community and the general public;
  • Protect national security by promoting compliance with U.S. trade and economic sanctions laws;
  • Support litigation against entities placed on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List);
  • Improve transparency into corporate structures used to disguise illicit business dealings; and
  • Prevent abuse of U.S. companies by criminal and terrorist organizations, corrupt individuals, and other blocked persons through cancellation of entities or imposition of OFAC penalties.

“The MOU will allow OFAC and the State of Delaware to work together to shut down or otherwise disrupt the illicit activities of entities that should not be operating in the United States,” said OFAC Director Andrea Gacki. “Enhanced collaboration with the Delaware Department of Justice will help OFAC to enforce its sanctions programs by more quickly identifying parties with an interest in blocked property.” 

“Delaware is recognized nationally and globally as a critical venue in the business community,” said Delaware Attorney General Kathy Jennings. “We take that role, and the responsibility that accompanies it, seriously. Delaware and OFAC’s partnership is a new chapter in a longstanding collaboration against abuse, and for the rule of law. We will not enable criminal enterprise in this State, and we are grateful for OFAC’s assistance in ensuring that the advantages of doing business in Delaware are not abused to break the law.”

“The Delaware Division of Corporations already cooperates regularly with our partners in federal law enforcement, including OFAC, to root out illegal activity connected to our state’s business registry,” said Delaware Secretary of State Jeffrey Bullock. “In recent years, we have changed state laws and regulations, and stepped up our work with the Department of Justice to shut down Delaware corporations and LLCs connected to illegal activity. This agreement builds on that progress, and I thank Attorney General Jennings for her commitment to this objective.”

OFAC and the Delaware Department of Justice will maintain frequent communication and meet as needed as part of the agencies’ efforts to identify and shut down entities on the SDN List or that are otherwise blocked.

View a copy of the MOU. 

September 8, 2020 in AML | Permalink | Comments (0)

Monday, September 7, 2020

U.S. International Trade in Goods and Services, July 2020

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $63.6 billion in July, up $10.1 billion from $53.5 billion in June, revised.

U.S. International Trade in Goods and Services Deficit
Deficit: $63.6 Billion +18.9%°
Exports: $168.1 Billion +8.1%°
Imports: $231.7 Billion +10.9%°

Next release: October 6, 2020

(°) Statistical significance is not applicable or not measurable. Data adjusted for seasonality but not price changes

Source: U.S. Census Bureau, U.S. Bureau of Economic Analysis; U.S. International Trade in Goods and Services, September 3, 2020

Goods and Services Trade Deficit: Seasonally adjusted
Coronavirus (COVID-19) Impact on July 2020 International Trade in Goods and Services

Exports and imports increased in July but remained below pre-pandemic levels, reflecting the ongoing impact of COVID-19, as many businesses continued to operate at limited capacity or ceased operations completely, and the movement of travelers across borders remained restricted. The full economic effects of the COVID-19 pandemic cannot be quantified in the trade statistics because the impacts are generally embedded in source data and cannot be separately identified. The Census Bureau and the Bureau of Economic Analysis continue to monitor data quality and have determined estimates in this release meet publication standards. For more information, see the frequently asked questions on goods from the Census Bureau and on services from BEA.

Exports, Imports, and Balance (exhibit 1)

July exports were $168.1 billion, $12.6 billion more than June exports. July imports were $231.7 billion, $22.7 billion more than June imports.

The July increase in the goods and services deficit reflected an increase in the goods deficit of $9.3 billion to $80.9 billion and a decrease in the services surplus of $0.8 billion to $17.4 billion.

Year-to-date, the goods and services deficit increased $6.4 billion, or 1.8 percent, from the same period in 2019. Exports decreased $257.8 billion or 17.5 percent. Imports decreased $251.3 billion or 13.8 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $3.3 billion to $58.3 billion for the three months ending in July.

  • Average exports increased $6.9 billion to $155.1 billion in July.
  • Average imports increased $10.2 billion to $213.4 billion in July.

Year-over-year, the average goods and services deficit increased $6.9 billion from the three months ending in July 2019.

  • Average exports decreased $55.7 billion from July 2019.
  • Average imports decreased $48.8 billion from July 2019.

Exports (exhibits 3, 6, and 7)

Exports of goods increased $12.3 billion to $115.5 billion in July.

  Exports of goods on a Census basis increased $12.3 billion.

  • Automotive vehicles, parts, and engines increased $3.8 billion.
    • Passenger cars increased $2.1 billion.
  • Consumer goods increased $2.6 billion.
    • Gem diamonds increased $0.7 billion.
    • Artwork, antiques, and other collectibles increased $0.6 billion.
  • Industrial supplies and materials increased $2.5 billion.
    • Crude oil increased $1.1 billion.
    • Other petroleum products increased $0.4 billion.
  • Capital goods increased $2.5 billion.
    • Semiconductors increased $0.8 billion.
    • Civilian aircraft engines increased $0.5 billion.

  Net balance of payments adjustments decreased less than $0.1 billion.

Exports of services increased $0.4 billion to $52.6 billion in July.

  • Other business services increased $0.3 billion.
  • Transport increased $0.3 billion.
  • Charges for the use of intellectual property increased $0.1 billion.
  • Travel decreased $0.4 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $21.5 billion to $196.4 billion in July.

  Imports of goods on a Census basis increased $21.5 billion.

  • Automotive vehicles, parts, and engines increased $7.7 billion.
    • Passenger cars increased $3.7 billion.
    • Automotive parts and accessories increased $2.5 billion.
  • Industrial supplies and materials increased $4.4 billion.
    • Finished metal shapes increased $1.3 billion.
    • Nonmonetary gold increased $0.9 billion.
    • Crude oil increased $0.7 billion.
  • Capital goods increased $4.1 billion.
    • Civilian aircraft increased $1.7 billion.
    • Electric apparatus increased $0.4 billion.
    • Generators and accessories increased $0.4 billion.
  • Consumer goods increased $3.5 billion.
    • Cell phones and other household goods increased $1.7 billion.
    • Cotton apparel and household goods increased $0.7 billion.
    • Furniture and household items increased $0.7 billion.

  Net balance of payments adjustments increased $0.1 billion.

Imports of services increased $1.2 billion to $35.3 billion in July.

  • Transport increased $0.5 billion.
  • Travel increased $0.3 billion.
  • Charges for the use of intellectual property increased $0.1 billion.
  • Insurance services increased $0.1 billion.

Real Goods in 2012 Dollars – Census Basis (exhibit 11)

The real goods deficit increased $10.1 billion to $90.5 billion in July.

  • Real exports of goods increased $13.1 billion to $133.7 billion.
  • Real imports of goods increased $23.2 billion to $224.2 billion.

Revisions

Exports and imports of goods and services were revised for January through June 2020 to incorporate more comprehensive and updated quarterly and monthly data.

Revisions to June exports

  • Exports of goods were revised up $0.3 billion.
  • Exports of services were revised down $3.1 billion.

Revisions to June imports

  • Imports of goods were revised down $0.2 billion.
  • Imports of services were revised up $0.2 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The July figures show surpluses, in billions of dollars, with South and Central America ($2.9), OPEC ($1.5), Hong Kong ($1.4), Brazil ($0.8), United Kingdom ($0.6), and Saudi Arabia ($0.3). Deficits were recorded, in billions of dollars, with China ($28.3), European Union ($13.1), Mexico ($11.5), Japan ($3.4), Germany ($3.0), Taiwan ($2.8), France ($2.5), India ($2.0), Italy ($1.8), South Korea ($1.5), Singapore ($1.0), and Canada ($0.5).

  • The deficit with Mexico increased $2.5 billion to $11.5 billion in July. Exports increased $2.4 billion to $17.8 billion and imports increased $4.9 billion to $29.3 billion.
  • The deficit with China increased $1.6 billion to $28.3 billion in July. Exports increased $0.1 billion to $9.5 billion and imports increased $1.7 billion to $37.8 billion.
  • The surplus with South and Central America increased $1.2 billion to $2.9 billion in July. Exports increased $1.3 billion to $9.7 billion and imports increased $0.1 billion to $6.8 billion.

Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (exhibit 20)

Statistics on trade in goods and services by country and area are only available quarterly, with a one-month lag. With this release, second-quarter figures are now available.

The second-quarter figures show surpluses, in billions of dollars, with South and Central America ($13.0), OPEC ($6.4), United Kingdom ($4.0), Brazil ($3.4), Saudi Arabia ($1.9), Hong Kong ($1.6), Canada ($0.6), and Singapore ($0.2). Deficits were recorded, in billions of dollars, with China ($75.8), European Union ($24.8), Mexico ($15.0), Germany ($12.4), Japan ($6.9), Taiwan ($6.7), India ($6.4), Italy ($4.9), South Korea ($4.5), and France ($2.7).

  • The deficit with China increased $21.4 billion to $75.8 billion in the second quarter. Exports increased $2.5 billion to $36.8 billion and imports increased $23.9 billion to $112.6 billion.
  • The surplus with South and Central America decreased $8.1 billion to $13.0 billion in the second quarter. Exports decreased $21.9 billion to $46.4 billion and imports decreased $13.8 billion to $33.4 billion.
  • The deficit with Mexico decreased $13.2 billion to $15.0 billion in the second quarter. Exports decreased $25.7 billion to $43.2 billion and imports decreased $38.9 billion to $58.2 billion.

September 7, 2020 in Economics | Permalink | Comments (0)

Sunday, September 6, 2020

Consultancy – Roster of Tax Experts (Tax Inspectors Without Borders)

Location : Varies for each call-off assignment
Application Deadline : 30-Sep-20 (Midnight New York, USA)
Time left : 27d 9h 1m
Additional Category : Management
Type of Contract : Individual Contract
Post Level : International Consultant
Languages Required :
Arabic   English   French   Russian   Spanish   Portuguese
Starting Date :
(date when the selected candidate is expected to start)
01-Oct-2020
Duration of Initial Contract : Varies for each call-off assignment
Expected Duration of Assignment : Varies for each call-off assignment

Objective:

The purpose of this procurement exercise is to relaunch the roster of Tax Experts to support the Tax Inspectors Without Borders (TIWB) Initiative. TIWB is a joint initiative of the United Nations Development Programme (UNDP) and the Organisation for Economic Co-operation and Development (OECD) launched in 2015 to support developing countries strengthen national tax administrations. In 2017, UNDP established a roster of tax experts to undertake TIWB missions to host countries – the countries where the TIWB programme is being implemented. Over time there has been an increased demand for specific tax audit expertise as well as for TIWB expertise in other areas related to taxation. Accordingly, a new roster of tax experts is being launched.

Background:

The UNDP is the United Nation's global development network, advocating for change and connecting countries to knowledge, experience, and resources to help people build a better life. UNDP is on the ground in 170 countries and territories, supporting solutions to development challenges in these countries and developing national and local capacities that will help them achieve human development and the Sustainable Development Goals.

UNDP's policy work carried out at HQ, Regional and Country Office levels, forms a spectrum of deep local knowledge to cutting-edge global perspectives and advocacy. In this context, UNDP invests in the Global Policy Network (GPN), a network of field-based and global technical expertise across a wide range of knowledge domains and in support of the signature solutions and organizational capabilities envisioned in the Strategic Plan. Within the GPN, the Bureau for Policy and Programme Support (BPPS) has the responsibility for developing all relevant policy and guidance to support the results of UNDP's Strategic Plan.

The OECD is a global economic forum working with 37 member countries and more than 100 emerging and developing economies to make better policies for better lives. Its mission is to promote policies that will improve the economic and social well-being of people around the world. The OECD provides a forum in which governments work together to share experiences on what drives economic, social, and environmental change, seeking solutions to common problems.

TIWB is a joint initiative of the UNDP and OECD launched in 2015 to support developing countries strengthen national tax administrations. The TIWB Secretariat is hosted at the OECD in Paris. Within UNDP, TIWB is managed under the Finance Sector Hub (FSH) - a finance and innovation platform, that draws on a critical mass of UNDP expertise, initiatives, and partnerships to support the mobilization and leveraging of resources for the SDGs and lead the implementation of the new UNDP’s private sector strategy and other initiatives. FSH is an integral part of both the Bureau for Policy and Programme Support (BPPS) and the Bureau of External Relations and Advocacy (BERA), as well as part of the GPN. TIWB is managed under the Finance Sector Hub, Bureau for Policy and Programme Support, New York with resource persons embedded in the UNDP offices in Pretoria, Bangkok, and Amman and a back office in Istanbul.

TIWB aims to strengthen tax administrations by transferring knowledge and technical skills to developing countries’ tax administrators. Under TIWB, tax experts work alongside local officials of developing country tax administrations on tax-related issues, delivering practical solutions by working on confidential matters while operating under strict oaths of secrecy/ confidentiality agreements. With 77 completed and ongoing programmes (including 13 South-South programmes) in 44 countries and jurisdictions, TIWB has contributed to over USD 532 million in additional revenues and tax assessments in excess of USD 1,750 million. 

Building on the success of the TIWB model and recognizing the needs of tax administrations, TIWB has expanded to provide support in other tax areas. These include Tax and Crime Investigations, Effective use of Automatically Exchanged Information, Tax Treaty Negotiations and Implementation, Tax and Natural Resource Contracts, and Tax and Environment. To support this new phase of the TIWB Initiative, UNDP is launching a new TIWB roster. Further, as part of the UNDP’s capacity enhancement efforts, the new TIWB roster is being brought on an automated platform as part of the GPN/ExpRes Roster. The new TIWB roster will have the following six thematic areas.

A. Tax Audits;

B.  Tax and Crime Investigations;

C.  Effective Use of Automatically Exchanged Information;

D. Tax Treaty Negotiations and Implementation;

E. Taxation and Natural Resource Contracts;

F.  Taxation and Environment.

Scope of work, responsibilities and description of the proposed work:

The UNDP is looking for tax experts to work as TIWB experts in different parts of the world. The main responsibility will be to provide technical assistance to tax administrations and other government agencies of developing countries in one of the thematic areas listed above. Experts will need to demonstrate extensive professional experience in the selected thematic area.

The assignments require close collaboration with the TIWB Secretariat, the UNDP, and the host administration in the developing country. The role will require traveling to developing countries to deliver four to six missions a year, each lasting one to two weeks. While a typical TIWB programme is on average 12 to 18 months long, the exact duration and frequency of missions depends on the programme. In between on-site TIWB missions, there is a component of TIWB remote assistance. In times of restrictions on travel due to COVID-19, TIWB assistance is being provided remotely.

Expected outputs and deliverables:

The representative set of duties and responsibilities listed below is not exhaustive, and the terms of reference of each assignment will dictate the exact scope of the work. Key areas of support and activities will include:

  • Deliver practical TIWB tax assistance to host administrations of requesting countries;
  • Assist the TIWB Secretariat in undertaking an analysis of the legislative, institutional and skills gaps and transfer of skills before (through baseline assessments) and after delivery of TIWB programmes;
  • Provide training on different topics at capacity-building workshops organized by the TIWB Secretariat, UNDP Country Offices and other international partners;
  • Prepare mission (and other) reports after every mission and at the end of the programme, including an evaluation of the programme;
  • Support the development of learning materials and internal guidelines or administrative practices, including case studies and documentation of lessons learned;
  • Attend, international and regional tax organization networking events to build capacity through knowledge sharing as part of TIWB programmes.

Core competencies:

  1. Demonstrates integrity by modelling the United Nation’s values and ethical standards, including demonstrating there are no conflicts of interest relating to any aspect of services provided to TIWB/UNDP/ host countries;
  2. Promotes the vision, mission, and strategic goals of UNDP, and partner organizations;
  3. Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability;
  4. Able to work independently.

Functional competencies:

  1. Technical expertise in at least one of the thematic tax areas listed above;
  2. Highly organized with strong analytical and research skills;
  3. Excellent presentation and communications skills;
  4. Ability to prepare succinct reports;
  5. Ability to work in a team;
  6. Diplomatic sensitivity and effective negotiating skills;
  7. Focus on impact and results and positive response to critical feedback;
  8. Flexible thinking.

Candidates may only apply for one thematic area that best suits their expertise. The six thematic areas along with the required and desired qualifications are as under:

A. Thematic Area - TAX AUDITS (Total – 100 Points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law or other relevant fields will be scored higher (Max 10 points);

Experience:

  • At least seven years of substantial, proven experience in tax auditing obtained from recently serving in a tax administration/ relevant Ministry or government agency is required (in cases where the candidate has a relevant Masters’ degree, a minimum of five years relevant professional experience is required). Substantial and additional experience will be scored higher (Max 20 points);
  • At least five years of work experience on international tax issues and in conducting transfer pricing audits, including experience in developing general audit approaches (e.g. risk assessment, case selection, audit planning) is required. Substantial and additional experience will be scored higher (Max 10 points);

 Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/certification(s) from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to tax audits (Max – 5 points);
  • Relevant experience in policy design and/or drafting tax legislation (Max – 10 points);
  • Sectoral audit experience, particularly in extractives, telecom, tourism, finance, and banking (Max – 10 points);
  • Proven experience of providing training and capacity development support to tax administration officials related to tax audits is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organization (Max -10 points);      
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

B. Thematic Area - TAX AND CRIME INVESTIGATIONS (Total – 100 points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law or other relevant fields will be scored higher (Max 10 points);

Experience:

  • Minimum seven years of substantial, proven experience in tax/ other financial crime investigations/ money laundering transactions/ illicit financial flows obtained from recently serving in a tax administration or government/ investigative/ enforcement agency is required (in cases where the candidate has a relevant Masters’ degree, a minimum of five years professional experience is required). Substantial and additional experience will be scored higher (Max 30 points);

Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/ certification from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to tax crimes/ other financial crimes (Max – 10 marks);
  • Substantial experience in working on legislation and/or policy design related to financial/ tax crimes (Max – 10 points);
  • Experience in drafting administrative/ Operational manuals/ guidance/ writing academic papers related to tax and crime (Max – 5 marks);
  • Proven experience in providing training to tax/ other investigative agency officials related to tax and crime/ other financial crimes investigations is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organisation (Max -10 marks);      
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

C. Thematic Area – EFFECTIVE USE OF AUTOMATICALLY EXCHANGED INFORMATION (Total – 100 points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law, information technology or other relevant fields will be scored higher (Max 10 points);

Experience:

  • At least five years of substantial experience in the field of exchange of information for tax purposes at the tax administration level and/or in compliance activities with respect to offshore financial assets obtained from recently serving in a tax administration/ relevant Ministry or government agency is required (in cases where the candidate has a relevant Masters’ degree, a minimum of three years relevant professional experience is required). Substantial and additional experience will be scored higher (Max 30 points);

Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/certification(s) from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to exchange of information for tax purposes or automatic exchange of information (Max – 10 points);
  • Substantial experience in working on legislation and/or policy design related to the exchange of information for tax purposes or automatic exchange of information (Max – 10 points);
  • Experience in drafting administrative/ Operational manuals/ guidance/ writing academic papers related to the exchange of information or automatic exchange of information (Max – 5 points);
  • Proven experience in providing assistance, guidance and/or training to tax/ other investigative agency officials is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organization (Max -10 marks);
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

D. Thematic Area – TAX TREATY NEGOTIATIONS AND IMPLEMENTATION (Total – 100 points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law or other relevant fields will be scored higher (Max 10 points);

Experience:

  • At least seven years substantial, proven experience in tax treaty negotiations and implementation obtained from recently serving in a tax administration/ relevant Ministry or government agency is required (in cases where the candidate has a relevant Masters’ degree, a minimum of five years relevant professional experience is required). Substantial and additional experience will be scored higher Max 30 points);

Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/certification(s) from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to taxation (Max – 10 points);
  • Substantial experience in working on legislation and/or policy design related to tax treaty negotiations and implementation (Max – 10 points);
  • Experience in drafting administrative/ Operational manuals/ guidance/ writing academic papers related to tax treaty negotiations and implementation (Max –5 points);
  • Proven experience in providing training to participants and technically proficient audiences is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organization (Max – 10 marks);          
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

E. Thematic Area – TAXATION AND NATURAL RESOURCES CONTRACTS (Total – 100 points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law or other relevant fields will be scored higher (Max 10 points);

Experience:

  • At least seven years of substantial, proven experience in international taxation, natural resources contracts, and extractive industries obtained from recently serving in a tax administration/ relevant Ministry or government agency. This could include negotiating and /or drafting commercial contracts settlements or arbitration associated with taxation clauses in natural resource contracts is required (in cases where the candidate has a relevant Masters’ degree, a minimum of five years relevant professional experience is required). Substantial and additional experience will be scored higher (Max 30 points);

Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/certification(s) from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to taxation and natural resources contracts (Max – 10 points);
  • Substantial experience in working on legislation and/or policy design related to taxation and natural resources contracts (Max – 10 points);
  • Experience in drafting administrative/ Operational manuals/ guidance/ writing academic papers related to taxation and natural resources contracts (Max –5 points);
  • Proven experience in providing training to participants and technically proficient audiences is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organization will be an advantage (Max -10 marks);
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

F. Thematic Area – TAXATION AND ENVIRONMENT (Total – 100 points)

Required Qualifications:

Education:

  • Minimum Bachelor’s degree required. Relevant and advanced degrees in taxation, public finance, law or other relevant fields will be scored higher (Max 10 points);

Experience:

  • At least seven years of substantial, proven experience in taxation and environmental issues obtained from recently serving in a tax administration/ relevant Ministry or government agency is required. This could include experience in taxation and forestry, fisheries and/ or carbon taxes (in cases where the candidate has a relevant Masters’ degree, a minimum of five years relevant professional experience is required). Substantial and additional experience will be scored higher (Max 30 points);

Language:

  • Working knowledge and communication skills in English is required.

Desirable Qualifications:

  • Course/certification(s) from a recognized national/ international organization/ institute in taxation, public finance, law or other field related to taxation and environment (Max – 10 points);
  • Three years of substantial experience in working on legislation and/or policy design related to taxation and environment (Max – 10 points);
  • Experience in drafting administrative/ Operational manuals/ guidance/ writing academic papers related to taxation and environment (Max – 5 points);
  • Proven experience in providing training to participants and technically proficient audiences is desirable, experience of working on such capacity development programmes of United Nations system/ OECD/ IMF/ World Bank or similar organization (Max -10 marks);
  • Experience of working in one or more of the following regions: Latin America & Caribbean; Africa; Arab States; Eastern Europe & CIS; Asia Pacific (Max - 10 points);
  • Fluency in the use of software like Word, Excel, and PowerPoint (Max – 5 points);
  • Fluency and specific working knowledge in one or more of the following languages - English/ French/ Portuguese/ Spanish/ Arabic/ Russian (Max. 10 points). Please note that fluency in any of these languages implies that you will be able to take on assignments in the specified language.

Application Procedure:

The application package containing the following (to be uploaded as one file):

  • Completed Thematic Area form (Annexure 1-6) indicating how the candidate fulfils the stated requirements (you may only apply for one thematic area). Please indicate the language (s) for which you are applying (English/ French/ Portuguese/ Spanish/ Arabic/ Russian) in the space given in the thematic area form.
  • Completed P11 form (Annexure 7), indicating all past experience from similar projects and specifying the relevant assignment period (from/to), as well as the email and telephone contacts of at least three (3) professional references;

Notes:

  • Convert the completed thematic area form and P11 form into PDF and merge them into a single document as the system allows uploading of only one document.
  • Please also note that applications must be submitted in English language irrespective of the language(s) you are applying. 
  • Due to the large number of applications we receive, we are able to inform only the successful candidates about the outcome or status of the selection process.

Shortlisted candidates (ONLY) will be requested to submit a Financial Proposal.

  • The financial proposal should specify an all-inclusive daily fee (based on a 7-hour working day - lunch time is not included).
  • This daily professional fee is exclusive of travel, accommodation and other subsistence costs incurred during missions. UNDP will arrange for travel by purchasing the return ticket; a standard DSA rate (daily sustenance) will be paid to the expert who in turn will arrange for their own accommodation, local travel and food.
  • Experts will be responsible for their own IT equipment, mobile phones, and travel insurance and medical insurance.
  • If the Offeror is employed by an organization/company/institution, and he/she expects his/her employer to charge a management fee in the process of releasing him/her to UNDP under a Reimbursable Loan Agreement (RLA), the Offeror must indicate at this point, and ensure that all such costs are duly incorporated in the financial proposal submitted to UNDP.

The Financial Proposal is to be submitted as per the instruction in the separate email that will be sent ONLY to shortlisted candidates.

6. Evaluation process:

Applicants will be evaluated against the criteria specified in the thematic area they have applied for. Applicants must meet the required qualifications. Candidates meeting the required qualifications will be scored based on a total of 100 points. Applicants obtaining 70 points and above (with a minimum of 30 in required qualifications) will be invited for the interview.

The interview will be of 40 points. Candidates who obtain a minimum of 30 points in the interview will be requested to submit a financial proposal and included in the Roster.

While no financial evaluation will be done for candidates at this stage, the reasonableness of the quoted daily professional fees shall be assessed based on the UN rate. If the proposed daily rate is too high and a mutually acceptable rate cannot be agreed upon, UNDP will not be able to include the candidate into the roster.

Contract Award and other arrangements:

Several successful individuals will be considered technically qualified and will be offered to be placed on the roster. When opportunities arise, tax experts on the roster will be contacted for availability and asked to submit a financial proposal for the assignments fitting their thematic area. The daily professional fee quoted by each candidate during the application stage will be the maximum fee to be quoted when a call is sent to the roster before a TIWB mission. Upon selection, an Individual Contract (IC) or Reimbursable Loan Agreements (RLA) will then be awarded for the assignment. This will have a specific term of reference, including the time frame.

NOTES:

  • All applicants are required to follow the rules and regulations pertaining to serving official’s participation in programmes of multilateral organisations. Approval from the requisite authority in the Government will be required before a tax expert can undertake a TIWB programme.
  • Once selected for the Roster, the experts have the responsibility of informing UNDP when their circumstances change (e.g. when he/she takes up a new role particularly a position in an audit firm which could create a potential conflict of interest).

Institutional arrangement:

  • The Consultants will be responsible for her/his own laptop.

Payment modality:

  • Payments to the Individual Contractors will be made following certification by the UNDP that the services contracted for have been performed satisfactorily and on time.

Annexes (click on the hyperlink to access the documents):

Annex 1 – Thematic Area – Tax Audits Form

Annex 2 – Thematic Area – Tax and Crime Investigations Form

Annex 3 – Thematic Area – Effective Use of Automatically Exchanged Information Form

Annex 4 – Thematic Area – Tax Treaty Negotiations and Implementation Form

Annex 5 – Thematic Area – Taxation and Natural Resource Contracts Form

Annex 6 – Thematic Area – Taxation and Environment Form

Annex 7 - UNDP P-11 Form for ICs

Annex 8 - IC Contract Template

Annex 9 – IC General Terms and Conditions

Annex 10 – RLA Template

NOTES:

  • Qualified women candidates are strongly encouraged to apply.
  • Any request for clarification must be sent by email to cpu.bids@undp.org
  • The UNDP Central Procurement Unit will respond by email and will send written copies of the response, including an explanation of the query without identifying the source of inquiry, to all applicants.

September 6, 2020 in OECD | Permalink | Comments (0)

Saturday, September 5, 2020

OECD and Brazil's federal revenue authority invite taxpayer input on transfer pricing issues relating to the design of safe-harbour provisions and other comparability considerations

As part of the implementation phase of a joint transfer pricing project between the OECD and Brazil, the OECD Secretariat and Receita Federal do Brasil (RFB) have launched a survey to seek public input to inform the work related to the development of safe harbours as well as other simplification measures and measures that can contribute to enhanced tax certainty.

BACKGROUND

The OECD and RFB jointly launched the "Transfer Pricing in Brazil" project in February 2018 to review and analyse the differences in the Brazilian transfer pricing rules as compared to the OECD standard. On 18 December 2019, the findings of the project were presented to the public with the publication of a joint report, Transfer Pricing in Brazil: Towards Convergence with the OECD Standard 1. The report identifies two options for Brazil to converge with the OECD standard, while enhancing the positive attributes of its existing transfer pricing framework. Both options contemplate full adherence to the arm's length principle, which is at the core of the OECD standard, while seeking to preserve simplicity and certainty. In this regard, consideration will be given to incorporating targeted, carefully designed safe harbours in appropriate circumstances. Safe harbours, which constitute simplified approaches for determining or approximating the arm’s length price – can achieve important benefits in terms of simplicity and certainty, if properly designed (in line with the arm’s length principle) and applied in appropriate circumstances (under specified eligibility criteria). They also reduce tax compliance costs for taxpayers and contribute to more efficient tax administration and tax certainty. Other measures and practices can also contribute to tax certainty in situations where safe harbours may not be an appropriate tool. Such measures and practices may include advance pricing arrangements (APAs), which also may provide a framework for achieving tax certainty in more complex and higher risk transactions.

SURVEY DOCUMENT

The survey document – available in both English and Portuguese – contains an open invitation particularly to taxpayers with business interests in Brazil and businesses interested in investing in Brazil as well as other stakeholders to contribute to the ongoing OECD/RFB project by providing their specific experience or comments on elements relevant to the development of safe-harbour regimes and other measures contributing to tax certainty in Brazil. This input should help to understand the specific situations and needs of taxpayers, where issues may arise when performing comparability analysis and also where the design of safe harbours or other similar measures contributing towards tax certainty would be especially needed.

To structure the input, a survey was designed containing 17 questions related to:

  • Identifying situations where specific safe-harbour regimes may be needed;
  • Use of the available comparables data;
  • Considerations for the use of advance pricing arrangements (APAs); and
  • Other simplification measures.

The questions are preceded by an introductory note providing the background and context of the questions. The OECD guidance on safe harbours in Chapter IV of the OECD Transfer Pricing Guidelines, which represents the policy framework for the development of safe harbours, is included as an annex.

Interested stakeholders are invited to send their input no later than Friday, 18 September 2020, by e-mail to TP.Brazil@oecd.org and copied to Cotin.df.cosit@rfb.gov.br.

Please note that this survey is strictly confidential; no individual or organisation-specific information will be disclosed. Results may only be made available in aggregated format.

September 5, 2020 in OECD | Permalink | Comments (0)

Friday, September 4, 2020

United States Reaches Settlement to Recover more than $60 Million Involving Malaysian Sovereign Wealth Fund

The Department of Justice has reached a settlement of its civil forfeiture cases against assets acquired by Riza Aziz utilizing funds allegedly embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg. Download Aziz Stipulation

These assets are estimated to be worth more than $60 million.  With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of nearly $1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme.  This represents the largest recovery to date under the department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by the Justice Department. 

“As alleged in the forfeiture complaints, Riza Aziz and others collectively laundered billions of dollars pilfered from 1MDB, an investment fund intended to benefit the Malaysian people,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Aziz and his co-conspirators allegedly diverted these funds for their own benefit and used them to acquire luxury real estate in New York and London and to make personal investments.  The forfeiture of these assets will add to the almost $1.1 billion stolen from 1MDB that the U.S. Department of Justice has so far helped recover and return to the Malaysian people.  This forfeiture sends a clear signal that the Department will not allow wrongdoers to use the U.S. financial system to launder the proceeds of their illegal activity.”

“With more than $1 billion forfeited as a result of our 1MDB-related asset forfeiture cases, we continue to shed light on the massive fraud and money laundering scheme that brazenly stole public funds belonging to the people of Malaysia,” said U.S. Attorney Nick Hanna of the Central District of California.  “The high-end properties across the nation that have now been seized and forfeited demonstrate our commitment to preventing corrupt actors from using the United States as a place to hide stolen riches.”

“This case represents significant, unwavering investigative work by the FBI's International Corruption Team and our partners,” said Assistant Director Calvin Shivers of the FBI's Criminal Investigative Division.  “Riza Aziz and his co-conspirators misappropriated and laundered billions of dollars away from Malaysian people for their personal gain, and they will not be permitted to profit.  The FBI is committed to bringing all those who participated in this heinous scheme to justice and holding them accountable for the illicit actions.”

“The recent seizure of $60 million is another step on the path to return embezzled funds to the people of Malaysia,” said Don Fort, Chief, IRS Criminal Investigation (IRS-CI).  “IRS-CI is committed to ensuring monies stolen from 1MDB are returned to their rightful beneficiaries and used for their original intended purpose.”

According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates and laundered through financial institutions in several jursidictions by Malaysian public officials and their associates, including Aziz.  1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people. 

Under the terms of the settlement, the claimants in the U.S. forfeiture actions agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest.  Claimants are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets.  The assets subject to the settlement agreement include the sale proceeds of high-end real estate acquired in Beverly Hills as well as a luxury condominium in New York City; the sale proceeds of an investment made by Aziz in a Kentucky maintenance company; a luxury London townhome; and a promotional poster for the 1927 motion picture film “Metropolis.”

The assets being forfeited subject to this settlement are in addition to the more than $1 billion in assets the United States previously forfeited in connection with the Department of Justice’s 1MDB investigation.  Following the conclusion of today’s settlement, several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.

The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case.  Deputy Chief Woo S. Lee and Trial Attorneys Barbara Levy, Jonathan Baum and Joshua Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Jonathan Galatzan and Steven R. Welk of the Central District of California are prosecuting the case.  The Justice Department’s Office of International Affairs provided substantial assistance.

The department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

September 4, 2020 in AML | Permalink | Comments (0)

Thursday, September 3, 2020

Tax Policy Advisors - Transparency and Exchange of Information for Tax Purposes (Job Number: 13800)

Application Closing Date: 20-09-2020, 4:59:00 PM

The OECD is a global economic forum working with 37 member countries and more than 100 emerging and developing economies to make better policies for better lives. Our mission is to promote policies that will improve the economic and social well-being of people around the world. The Organisation provides a unique forum in which governments work together to share experiences on what drives economic, social and environmental change, seeking solutions to common problems. 

The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) has played a key role in the development and acceptance of international standards on transparency and effective exchange of information (EOI) for tax purposes and in monitoring progress in implementing these standards. It has played a critical role in the international community’s efforts over the past ten years to counter international tax avoidance and evasion. The Global Forum currently includes over 160 members on an equal footing, a list of whom can be found on the Global Forum website www.oecd.org/tax/transparency. 

The Global Forum Secretariat is based in the OECD’s Centre for Tax Policy and Administration (CTPA), which is the focal point for the OECD’s work on all taxation issues, both international and domestic. 

The Global Forum’s primary focus is to oversee the implementation of the standards. The main part of the Global Forum’s work is to prepare peer review reports which assess a jurisdictions’ legal framework for exchange of information as well its practices. The Global Forum peer review work includes monitoring and reviewing jurisdictions’ implementation of the new international standard on Automatic Exchange of Information (AEOI). This includes reviewing and preparing reports on member tax administrations’ Information Security Management (ISM) arrangements and their safeguarding of data exchanged under international EOI agreements to seek to ensure that these are aligned with internationally recognised information security standards. The Global Forum also provides capacity building services and technical assistance to member jurisdictions, particularly developing country tax administrations, to help them implement the standards in the area of ISM in order to participate and benefit from AEOI and the new environment of tax transparency and EOI.

The Global Forum is currently seeking several Tax Policy Advisors to contribute to the work set out above. As members of a team of experts, the successful candidates will be involved in a variety of activities including the preparation of peer review reports for EOIR, monitoring and reviewing the implementation of the AEOI standard and the provision of training and technical assistance to member jurisdictions to enable them to implement the standards and to benefit from them.

Availability and willingness to undertake international travel is required.

The vacancy is open to nationals of OECD member countries and jurisdictions of the Global Forum.
 
Main Responsibilities
 
Analysis and Drafting
  • Conducting EOIR peer reviews, including preparing draft review reports, incorporating input and comments received and taking them through the Global Forum’s approval processes.
  • Monitor the implementation of the standard in AEOI and conduct reviews of its implementation, both in relation to the legal frameworks being put in place and its effectiveness in practice.
  • Prepare policy briefs, press releases, background papers, presentations and other documents related to the Global Forum’s work.

Technical and Implementation Support

  • Provide technical assistance through seminars or workshops on both the legal and practical aspects of exchange of information standards.
  • Prepare and deliver training and technical support to member jurisdictions and assist them in implementing the international standards.
  • Advise members in finding the most resource-effective ways to implement the standards and establish a network of international information exchange instruments.

Meetings, Representation and Liaison

  • Participate in and contribute to the preparation of meetings of the Global Forum and its subsidiary bodies and other related meetings.
  • Establish and maintain contact with officials from member jurisdictions participating in the Global Forum’s work and meetings.
  • Promote the work of the Global Forum externally through participation in conferences, seminars and contacts with civil society and non-governmental stakeholders.
  • Liaise with other relevant international organisations.
 
Ideal Candidate profile 

Academic Background 

  • An advanced university degree, or equivalent, in law or other relevant disciplines (e.g. economics) preferably with a specialisation in taxation and/or taxation policy. Knowledge of company law and/or financial law would be an asset. 

Professional Background

  • A minimum of three, preferably five years’ experience in international tax law or administration or financial/corporate regulations, providing advice to governments on international tax policy or administration issues and/or experience as a tax examiner/adviser.
  • Experience of complex tax projects involving different inter-organisational and/or inter-governmental stakeholder groups.
  • Expertise in the legal and/or practical aspects of exchange of information for tax purposes and familiarity with OECD and Global Forum work.
Languages
  • Fluency in one of the two OECD official languages (English and French) and knowledge of the other, with a commitment to reach a good working level.
  • Knowledge of Spanish would be an asset. 
Core Competencies 
  • For this role, the following competencies would be particularly important: Achievement focus, Analytical thinking, Drafting skills, Strategic networking and Team work.
  • Please refer to the full list of OECD Core Competencies and the level 3 indicators.
 
Contract Duration 
  • Two-year fixed term appointment, with the possibility of renewal.
 
  • Depending on level of experience, monthly salary starts at either EUR 6 130 or EUR 7 563, plus allowances based on eligibility, exempt of French income tax. 
  • Please note that the appointment may be made at a lower grade based on the qualifications and professional experience of the selected applicant.

September 3, 2020 in OECD | Permalink | Comments (0)

The Platform for Collaboration on Tax invites public comments on the draft Toolkit on Tax Treaty Negotiations by 10 September

The Platform for Collaboration on Tax (PCT) – a joint initiative of the IMF, OECD, UN and World Bank Group – is seeking feedback from the public on a draft toolkit designed to help developing countries build capacity in tax treaty negotiations.

PCT's Draft Toolkit on Tax Treaty Negotiations is a joint effort to provide capacity-building support to developing countries on tax treaty negotiations, building on existing guidance, particularly from the UN Manual for the Negotiation of Bilateral Tax Treaties between Developed and Developing Countries (the "UN Manual"). The Toolkit describes the steps involved in tax treaty negotiations such as how to decide whether a comprehensive tax treaty is necessary, how to prepare for and conduct negotiations, and what follow-up measures to take after negotiations. Treaty negotiating teams, especially those who are new to the process, can also find practical tips on the conduct of negotiations and negotiation styles.

Additionally, the Toolkit collates links to publicly available resources that treaty negotiators will find useful, making them easily accessible for treaty teams. The design of the Toolkit allows regular updates and improvements based on the feedback from users and experienced negotiators.

The PCT Secretariat is now seeking comments on the discussion draft of the Toolkit by 10 September 2020 from interested stakeholders. Comments can be sent in two ways:

  • All interested stakeholders: Please send your comments by e-mail to taxcollaborationplatform@worldbank.org
  • Tax administrations and international or regional tax organisations can also provide their comments on the Knowledge Sharing Platform for Tax Administrations Web site (KSP-TA) by registering HERE

The PCT Secretariat aims to release the final toolkit in early 2021. French and Spanish versions of the discussion draft of the Toolkit will also follow. For more information on the public comment process, please visit the PCT's official website.

September 3, 2020 in OECD | Permalink | Comments (0)

Colorado Man Sentenced to 11 Years in Prison for Moderating Disputes on Darknet Marketplace AlphaBay

A Colorado man was sentenced today by U.S. District Court Judge Dale A. Drozd to 11 years in prison.

According to court documents, Bryan Connor Herrell, 26, of Aurora, Colorado, was a moderator on the AlphaBay marketplace, an illegal website that operated on the so-called darknet.  On AlphaBay, vendors and purchasers engaged in hundreds of thousands of illicit transactions for guns, drugs, stolen identity information, credit card numbers and other illegal items.  At the time, AlphaBay was the world’s largest online drug marketplace.

“This sentence of an AlphaBay employee demonstrates the collective efforts of law enforcement authorities in the United States and Europe to find and prosecute transnational criminal actors wherever they hide,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “The department will continue to work tirelessly to hold accountable criminals who use the Dark Web to facilitate illegal activity no matter where they may be located.”

“This sentence serves as further proof that criminals cannot hide behind technology to break the law,” said U.S. Attorney McGregor Scott of the Eastern District of California.  “Operating behind the veil of the darknet may seem to offer shelter from criminal investigations, but people should think twice before ordering or selling drugs online—you will be caught.  This office will continue using all means available to pursue darknet-based crimes, particularly those involving fentanyl, opioids, and other dangerous drugs.”

“The FBI is committed to developing highly trained cyber investigators who work with our international partners and perpetually evolve to counter the threat darknet criminals pose.  Cases like these exemplify how the FBI and our international partners are eliminating the false promise of anonymity dark marketplaces claim to provide and are successfully dismantling criminal organizations which prey upon communities through use of sophisticated computer code,” said Special Agent in Charge Sean Ragan of the FBI’s Sacramento Field Office.  “Herrell's sentence sends a clear message to criminals that the darknet is no safe haven for illegal transactions.”

As a moderator on AlphaBay, Herrell settled disputes between vendors and purchasers. He is also served as a scam watcher – providing a service dedicated to monitor attempts to defraud AlphaBay users.  Herrell went by the monikers “Penissmith” and “Botah” and was paid in Bitcoin for his participation.

On June 1, 2017, a Fresno grand jury indicted the alleged founder of AlphaBay, Alexandre Cazes.  On July 5, 2017, the Royal Thai Police, with assistance from the FBI and DEA, executed an arrest warrant for Alexandre Cazes at his residence in Bangkok, in connection with his alleged involvement with AlphaBay.  At the time of his arrest, law enforcement discovered Cazes’s laptop open and in an unencrypted state.  Agents and officers found several text files that identified the passwords/passkeys for the AlphaBay website, the AlphaBay servers, and other online identities associated with AlphaBay.  The indictment against Cazes was dismissed as a result of his death.  The investigation of AlphaBay and its former administrators continues.

September 3, 2020 in AML | Permalink | Comments (0)

Michigan Man Charged with COVID-Relief Fraud

A Michigan man was arrested today in connection with a wire fraud scheme involving $3.1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  Download George Criminal Complaint

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Field Office, and Inspector General Hannibal Mike Ware of the SBA’s Office of the Inspector General (OIG) made the announcement.

Antonio George, 44, of Novi, Michigan, was charged with a criminal complaint, unsealed today, in the Eastern District of Michigan with one count of wire fraud.  He made his initial appearance today before U.S. Magistrate Judge David R. Grand.

The complaint alleges that George was the nexus in an attempt to obtain approximately $3.1 million in PPP loans through applications to insured financial institutions, and others, on behalf of 19 different companies.  The complaint alleges that George provided false and misleading documents about certain of the companies’ respective business operations and payroll expenses.  As an example of such false documentation, the complaint alleges that George submitted identical wage information and employee count records for two separate companies. One of those companies has allegedly not been operational since 2015.

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding. The CARES Act also authorizes the SBA to provide Economic Injury Disaster Loans (EIDL) of up to $2 million to eligible small businesses experiencing financial disruption due to the COVID-19 pandemic.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and the SBA-OIG.  Trial Attorney Patrick J. Suter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan are prosecuting the case.

September 3, 2020 in AML | Permalink | Comments (0)

Wednesday, September 2, 2020

Four Charged For Multi-Million Dollar Elder Fraud Schemes

Four individuals responsible for mass-mailing fraud schemes were charged with allegedly defrauding thousands of elderly and vulnerable victims, the department announced yesterday.  Two U.S. individuals and two Canadian individuals were charged for their roles in operating the schemes, which collectively caused tens of millions of dollars in victim losses.  Two defendants were charged in the Eastern District of New York and two defendants were charged in the District of Nevada.

“Fraud schemes are intolerable, especially those that harm our nation’s seniors,” said Acting Assistant Attorney General Ethan P. Davis of the Department of Justice’s Civil Division.  “As Attorney General Barr made clear earlier this year when he announced record results in the 2020 Elder Fraud Sweep, the Department of Justice is committed to protecting seniors.  These two cases illustrate that the Civil Division’s Consumer Protection Branch, together with partners at the Postal Inspection Service, will not stop until the scourge of elder fraud is defeated.” 

“These charges demonstrate the Postal Inspection Service will relentlessly pursue these fraudulent schemes until they no longer arrive in your mailbox,” said Deputy Chief Inspector Craig Goldberg of the Postal Inspection Service.  “Prize notices like these are mailed in an attempt to trick our elderly and vulnerable Americans, while the perpetrators attempt to hide their involvement around the corner or around the globe.  We are committed, with the Department of Justice, to protect our older Americans.”

“These individuals mailed their fraudulent prize promotions to victims in blatant defiance of prior Postal Service consent orders and agreements that prohibited them from doing so.  The fact that many of the victims were elderly and vulnerable makes the defendants’ conduct particularly egregious.  The Postal Inspection Service will continue its efforts to protect the public from fraud schemes and bring the perpetrators of those schemes to justice,” said Inspector in Charge Philip R. Bartlett.

 Two Long-Island Residents Indicted for Multi-Million Dollar Elder Fraud Scheme

An indictment unsealed today charges Long Island residents Sean Novis, 50, and Gary Denkberg, 57, with conspiracy to commit mail fraud and multiple mail fraud and wire fraud counts for running a fraudulent mass-mailing scheme that tricked thousands of consumers into paying fees for falsely promised prizes.  Novis and Denkberg made their initial appearances in U.S. District Court for the Eastern District of New York after they were arrested by United States Postal Inspectors Monday morning.

The indictment alleges that, from January 2003 to September 2016, the defendants mailed hundreds of thousands of prize notices that represented that victims were specially chosen to receive a large cash prize and would receive the prize if they paid a small fee.  Victims who paid the requested fee, however, did not receive the promised cash prize.  Although the notices appeared to be personalized correspondence, they were merely mass-produced, boilerplate documents that were bulk mailed to recipients whose names and addresses were on mailing lists.

According to the indictment, Novis and Denkberg continued to operate their fraudulent mass-mailing scheme in violation of United States Postal Service cease-and-desist agreements and consent orders that they agreed to in 2012.  The agreements and orders had permanently barred the defendants from mailing fraudulent prize notices.

Each charge in this case carries a statutory maximum sentence of twenty years in prison, and a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.

The United States Postal Inspection Service investigated the case.  The case is being prosecuted by Trial Attorneys Artie DeCastro and Daniel Zytnick of the Department of Justice Civil Division’s Consumer Protection Branch.  The Consumer Protection Branch thanks  the U.S. Attorney’s Office for the Eastern District of New York for its assistance in this case.

Canadian Nationals Charged For Long-Running Elder Fraud Schemes

In a separate indictment filed on August 5 in the District of Nevada, Canadian nationals Alex Quaglia and Patrick Fraser were charged with mail fraud and conspiracy to commit mail fraud in connection with schemes to defraud consumers by sending deceptive mailing pieces that falsely promised large cash prizes in exchange for payment of a fee.  Many of the victims were elderly.  The solicitations were sent using fictitious names and were designed to deceive recipients into believing that they had won hundreds of thousands or millions of dollars.  To claim their winnings recipients were directed to pay a small fee.  In fact, there was no cash prize sent to victims, and Quaglia, Fraser and their co-conspirators pocketed the money sent by victims.

“As alleged in the indictment, victims in Nevada, across the country, and around the world were defrauded of money in connection with the defendants’ schemes,” said U.S. Attorney Nicholas A. Trutanich for the District of Nevada. “Working with our Postal Inspectors and other law enforcement partners, we will identify, investigate, and prosecute criminals – both foreign and domestic – who prey on our seniors and other vulnerable Nevada residents. These fraud schemes can happen to anyone.”

The scheme allegedly caused millions of dollars in losses to thousands of victims.  Quaglia was charged with one conspiracy to commit mail fraud count and seven counts of mail fraud.  Quaglia’s scheme is alleged to have begun as early as 2000.  Fraser was charged with conspiracy to commit mail fraud with Quaglia and with a separate conspiracy charge related to a similar scheme he orchestrated after breaking away from Quaglia’s operation in 2015.  Fraser was also charged with six counts of mail fraud.  Each charge of the indictment carries a statutory maximum sentence of twenty years in prison along with a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.

The United States Postal Inspection Service investigated the case.  The case is being prosecuted by Trial Attorneys Matt Lash and Yolanda McCray Jones of the Department of Justice Civil Division’s Consumer Protection Branch with substantial assistance from Assistant U.S. Attorney Nicholas Dickinson from the U.S. Attorney’s Office for the District of Nevada.  The Criminal Division’s Office of International Affairs has also provided critical support.

An indictment is an accusation by a federal grand jury and is not evidence of guilt.  The defendant should be presumed innocent unless and until proven guilty.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep.  The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act. 

September 2, 2020 in AML | Permalink | Comments (0)