International Financial Law Prof Blog

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

Tuesday, February 28, 2017

FTC to Explore Charitable Solicitations

Americans are among the most generous people in the world, contributing more than $373 billion to charity in 2015, according to The Giving Institute. We’re all familiar with phone calls, mailers, and TV and radio spots seeking donations, but the times are changing. Evolving marketing practices and new technologies have introduced new ways to solicit contributions and donate.

That’s just one of the reasons the FTC and the National Association of State Charities Officials (NASCO) are hosting a workshop on March 21, 2017 in Washington, DC.

The event, Give & Take: Consumers, Contributions, and Charity, will bring together regulators, researchers, charity watchdogs, donor advocates, and members of the nonprofit sector. Discussions will focus on how people evaluate and respond to various charitable solicitation practices and the role of consumer protection. For more information, please visit the workshop page.

In the meantime, consider these tips when asked to give: 

  • Donate to charities you know and trust and that have a proven track record.
  • Don’t assume that charity messages posted on social media are legitimate. Research the organization yourself.
  • When texting to donate, confirm the number with the source before you donate. The charge will show up on your mobile phone bill, but donations are not immediate. It can take as long as 90 days for the charity to receive the funds.

February 28, 2017 in Financial Regulation | Permalink | Comments (0)

Monday, February 27, 2017

Outcomes of the Plenary meeting of the FATF, Paris, France, 20–24 February 2017

Under the Spanish Presidency of Mr. Juan Manuel Vega-Serrano, the second Plenary meeting of Plenary year FATF-XXVIII was held. 

Mr. Michel Sapin, French Minister of Finance and Public Accounts, addressed the Plenary to emphasize FATF’s important role in ensuring the integrity of the international global system from threats such as terrorist financing, and his country’s commitment to increase the traction capacity of the FATF even further. 

The main issues dealt with by this Plenary meeting were:


In the margins of the Plenary meeting, the FATF organised a Fintech and Regtech Roundtable. This first meeting involved representatives from the banking sector, engaged in Fintech activities. The discussions will feed into future events with representatives from the Fintech and Regtech communities. FATF aims to develop a constructive dialogue with both communities, in order to support a more effective implementation of the FATF Standards and innovation in financial services.

February 27, 2017 | Permalink | Comments (0)

Sunday, February 26, 2017

Key considerations for university cross-border quality assurance

EUA has worked with four of its key partners to produce a new document that provides support and information for institutions and quality assurance agencies that engage in cross-
border quality assurance.The development of the European Higher Education Area (EHEA) through the Bologna Process has contributed to an increase in cross-border exchange and cooperation in higher education and facilitates the enhancement of trust and confidence among higher education systems. In this context, there is increasing attention to cross-border quality assurance, whereby a quality assurance agency evaluates a higher education institution (or one of its programmes) that is based outside the agency’s normal area of operation. 

EUA has worked in cooperation with ENQA (European Association for Quality Assurance in Higher Education), ESU (European Students’ Union), EURASHE (European Association of Institutions in Higher Education) and EQAR (European Quality Assurance Register for Higher Education) to develop the “Key considerations for cross-border quality assurance in the EHEA”, which contains a set of questions to be taken into account to support the success of cross-border quality assurance activities.

This publication builds on previous work carried out by EUA and the partner organisations in the field of quality assurance, including as authors of the “Standards and guidelines for quality assurance in the EHEA” (ESG). 

February 26, 2017 in Education | Permalink | Comments (0)

Saturday, February 25, 2017

Prize Scams: Don’t Pay to Play

You get a phone call from an excited caller saying you’ve won a trip, a car, or a lot of money. Next, they ask you to send money before you get the prize. That is a sure sign of a scam. 1024px-US-FederalTradeCommission-Seal.svg

Recently, we’ve heard about a spike in prize scam calls. Although there are some legitimate contests, remember: there are a lot of scams. Here are a few ways to spot a prize scam:

  • Scammers ask you to pay before you can claim your prize. Legitimate sweepstakes don’t make you pay a fee or buy something to enter or improve your chances of winning. Scammers might try to sound official and say it’s for “taxes,” “shipping and handling charges,” or “processing fees.”  Don’t pay to claim a prize, and never give your checking or credit card number for a sweepstakes promotion.
  • Scammers ask you to wire money to “insure” delivery of your prize. Don’t do it. Legitimate sweepstakes don’t ask you to wire money. Once you wire money, you can’t get it back. The same goes for sending a check or money order by overnight delivery or putting money on a prepaid debit card.
  • Scammers send you a check and ask you to send some of the money back. But the check is fake, and you’re responsible for repaying the bank.
  • Scammers use the names of well-known companies for prize scams. Con artists often pretend to call from well-known companies to make themselves appear legitimate and gain your trust. If you don’t remember entering, you probably didn’t. If you think it may be legit, use a search engine to find the company’s real phone number. Call to confirm that you entered a contest before responding to any claims that you won.

If you’re suspicious of a prize offer, report it to us.

February 25, 2017 | Permalink | Comments (0)

Friday, February 24, 2017

Pedagogical Knowledge and the Changing Nature of the Teaching Profession

Pedagogical Knowledge and the Changing Nature of the Teaching Profession

Highly qualified and competent teachers are fundamental for equitable and effective education systems. Teachers today are facing higher and more complex expectations to  help students reach their full potential and become valuable members of 21st century society. The nature and variety of these demands imply that teachers, more than ever before, must be professionals who make decisions based on a robust and updated knowledge base.

This publication presents research and ideas from multiple perspectives on pedagogical knowledge - the knowledge of teaching and learning - and the changing nature of the teaching profession. It provides a modern account of teachers’ professional competence, and how this relates to student learning. The report looks at knowledge dynamics in the teaching profession and investigates how teachers’ knowledge can be measured. It provides precious insights into 21st century demands on teacher knowledge.

This volume also offers a conceptual base for a future empirical study on teachers’ knowledge. It will be a useful resource for those interested in understanding the different factors underlying high quality teaching through examining and outlining the complexity of the teaching profession. In particular, this publication will be of interest to teacher educators, educational leaders, policy makers and the research community.

February 24, 2017 in Education | Permalink | Comments (0)

Thursday, February 23, 2017

FATF Plenary Discussions This Week

The FATF 7 days of meetings in Paris began on 18 February, involving up to 800 delegates from the 198 jurisdictions of the FATF Global Network as well as the UN, IMF, World Bank FATF logo and other partners. This will include the second Plenary meeting under the Spanish Presidency of Juan Manuel Vega-Serrano that takes place on 22-24 February. The items discussed will include among others the following:

Counter terrorist financing: We will be considering changes to the way ISIL are financed and focussing on areas such as the financing of recruitment for terrorist purposes. We will also consider how we can further strengthen the traction capacity and effectiveness of the FATF and its Global Network, given the importance of swift and effective implementation of FATF standards worldwide to tackle all sources, techniques and channels of terrorist financing, recalling the G20 Communique from Chengdu. 

Transparency and beneficial ownership: We will continue to leverage the full weight of FATF member countries and the Global Network to help prevent the abuse of companies and trusts for criminality and terrorism, including through focussing on vulnerabilities linked to beneficial ownership, the enforcement and supervision of beneficial ownership obligations, and collaboration with the OECD Global Forum on Tax in order to ensure consistency and maximum impact of both bodies’ peer review processes.

Sweden: We will review the mutual evaluation of Sweden and its effectiveness in tackling money laundering and terrorist financing.

In addition, we will review progress by countries with outstanding deficiencies from the last round of evaluations, such as Brazil and South Africa. FATF will continue to monitor the negative impact on AML/CFT efforts of de-risking by the clearing banks, and identify areas where further clarification of the risk-based approach is required.  And we will pursue the other priorities of the Spanish presidency, including a greater operational focus with a second meeting of FATF Heads of Financial Intelligence Units, and a dialogue on Fintech through a roundtable with representatives of the banking sector.

February 23, 2017 | Permalink | Comments (0)

Spanish Royal Family Member Sentenced to Prison for Tax Evasion and Theft of Public Funds

El Pais story here

NBC News story here: "The king of Spain's brother-in-law was found guilty of fraud and tax evasion and sentenced to more than six years in prison on Friday. ..."

February 23, 2017 in Tax Compliance | Permalink | Comments (0)

Wednesday, February 22, 2017

European Commission Finds Spain Penalties for Non Reporting of Foreign-Held Assets are Discriminatory and Not Proportionate

The European Commission sent a reasoned opinion to Spain today requesting to change its rules on assets held in other EU or the European Economic Area (EEA) Member States EU Council("Modelo 720").

While the Commission takes the view that Spain has the right to require taxpayers to provide its authorities with information on certain assets held abroad, the fines charged for failure to comply are disproportionate. As fines are much higher than penalties applied in a purely national situation, the rules may deter businesses and private individuals from investing or moving across borders in the single market.  Such provisions are consequently discriminatory and in conflict with the fundamental freedoms in the EU. In the absence of a satisfactory response within two months, the Commission may refer the Spanish authorities to the Court of Justice of the EU.

February 22, 2017 in GATCA, Tax Compliance | Permalink | Comments (0)

Tuesday, February 21, 2017

FATF Summary of Outcomes from the Industry Roundtable on FinTech and RegTech

The Financial Action Task Force (FATF) held a roundtable on FinTech and RegTech in Paris on 18 February 2017. The roundtable was chaired by the FATF President, Mr. Juan Manuel Vega-Serrano.

Technology-based innovations are starting to radically change the financial industry. The FATF has already undertaken a large body of work to understand the risks and vulnerabilities FATF logo of new payment products and services, and to ensure that AML/CFT measures remain up-to-date as new technologies emerge. The next step and one of the key priorities of the Spanish Presidency is to develop a partnership with the FinTech and RegTech community to support innovation in financial services, while maintaining transparency and mitigating the associated risks. Building such a partnership will enable FATF to become more proactive in the development of standards, guidance and best practice, anticipating and being involved in these new developments rather than responding to them.

Today’s roundtable was a first step to take this initiative forward in order to engage with various stakeholders. The event brought together anti-money laundering/counter-terrorist financing (AML/CFT) professionals, national supervisors, international organisations and other relevant experts, including experts from banks which have partnered with FinTech and RegTech firms to discuss issues of common interest.

Participants in this dialogue included 144 delegates from 30 jurisdictions and 14 organisations, as well as 11 representatives from the banking sector. The key objective of this roundtable was to better understand and exchange views on the current and emerging state of play on interaction of the established traditional financial institutions with the FinTech and RegTech industries, and the impact financial innovations and technologies are having (or expected to have) on reshaping the delivery and provisions of financial services. The practical impact of AML/CFT standards on financial innovation and different approaches followed by a number of jurisdictions to help promote innovative business models and emerging technologies, while mitigating and addressing associated money laundering and terrorist financing risks, were also discussed.

During the half a day-long series of discussions, representatives of financial institutions shared their experiences in the emerging FinTech and RegTech solutions in areas such as distributed ledger technologies, new payment methods and techniques, digital currency, regulatory reporting solutions and products and technologies supporting initial and ongoing customer due diligence measures. Participants also noted how these and other related developments in the emergence of new products, services and technologies are creating opportunities for growth and efficiency, and at the same time, posing challenges both for the private and the public sector.

Since the global nature of some of these developments has a cross-border implication, participants also stressed upon the need to have effective mechanisms for proactive information sharing among relevant stakeholders, in order to take a more coordinated approach in addressing the emerging challenges.

The FATF will continue to remain engaged with these issues through a much broader engagement, including with representatives from the FinTech and RegTech industry, going forward.

More on:

Guidance for a Risk-Based Approach to Virtual Currencies

Guidance for a Risk-Based Approach to Prepaid Cards, Mobile Payments and Internet-Based Payment Services 

February 21, 2017 | Permalink | Comments (0)

Monday, February 20, 2017

China Agricultural Scientist Convicted in Theft of Engineered Biopharmaceutical Rice From Kansas

A federal jury returned guilty verdicts today in the case of a Chinese scientist, who was charged with conspiring to steal samples of a variety of rice seeds from a Kansas biopharmaceutical research facility.  Weiqiang Zhang, 50, a Chinese national residing in Manhattan, Kansas, was convicted on one count of conspiracy to steal trade secrets, one count FBI DOJ logoof conspiracy to commit interstate transportation of stolen property and one count of interstate transportation of stolen property. 

Evidence at trial established that Zhang worked as a rice breeder for Ventria Bioscience in Junction City, Kansas.  Ventria develops genetically programmed rice to express recombinant human proteins, which are then extracted for use in the therapeutic and medical fields.  Zhang has a master’s degree in agriculture from Shengyang Agricultural University in China and a doctorate degree from Louisiana State University.

According to trial evidence, Zhang acquired without authorization hundreds of rice seeds produced by Ventria and stored them at his residence in Manhattan.  The rice seeds have a wide variety of health research applications and were developed to express either human serum albumin, contained in blood, or lactoferrin, an iron-binding protein found, for example, in human milk.  Ventria used locked doors with magnetic card readers to restrict access to the temperature-controlled environment where the seeds were stored and processed.

Trial evidence demonstrated that in the summer of 2013, personnel from a crop research institute in China visited Zhang at his home in Manhattan.  Zhang drove the visitors to tour facilities in Iowa, Missouri and Ohio.  On Aug. 7, 2013, U.S. Customs and Border Protection officers found seeds belonging to Ventria in the luggage of Zhang’s visitors as they prepared to leave the United States for China.

The FBI’s Little Rock, Arkansas, Field Office and Kansas City, Missouri, Field Office, U.S. Customs and Border Protection and the U.S. Attorney’s Office for the Eastern District of Arkansas investigated the case.  Trial Attorney Matt Walczewski of the National Security Division, Trial Attorneys Brian Resler and Evan Williams of the Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Scott Rask of the District of Kansas prosecuted the case.

February 20, 2017 | Permalink | Comments (0)

Sunday, February 19, 2017

U.S. Navy Commander Charged as Part of Expanding Navy Bribery Scandal

A current U.S. Navy Commander was charged in a complaint unsealed today with accepting luxury travel, elaborate dinners and services of prostitutes from foreign defense contractor Leonard Francis in exchange for classified and internal U.S. Navy information.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson of the Southern District of California, Navy DOJDirector Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) made the announcement.

Mario Herrera, 48, of Helotes, Texas, was charged with one count of conspiracy to commit bribery in connection with interactions with Leonard Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore.  Herrera was arrested in San Antonio, Texas, this morning and is scheduled to make his initial appearance in federal court in the Western District of Texas.  The United States will seek removal of Herrera to San Diego to face charges.

According to the complaint, Herrera participated in a bribery scheme with Francis in which he accepted luxury travel and entertainment expenses and the services of prostitutes in exchange for helping to steer lucrative U.S. Navy contracts to Francis and GDMA.  Herrera provided Francis with internal, proprietary U.S. Navy information and intervened on GDMA’s behalf in contract disputes.  According the complaint, Herrera directed ships to take alternative routes that benefitted GDMA on two separate occasions, costing the U.S. Navy $3.6 million.    

To date, a total of 17 individuals have been charged in connection with the scheme; of those, 13 have pleaded guilty, including: Admiral Robert Gilbeau, Captain Michael Brooks, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, former NCIS Special Agent John Beliveau and U.S. Petty Officer First Class Daniel Layug.

Brooks, Gilbeau and Sanchez await sentencing.  In May 2016, Pitts was charged and his case is currently pending.  On Jan. 21, 2016, Layug was sentenced to 27 months in prison and to pay a $15,000 fine.   On Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine.  On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine.  On April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay  $95,000 in restitution to the Navy and a $100,000 fine.  On Oct. 14, 2016, Beliveau was sentenced to 12 years in prison and to pay $20 million in restitution.  On Dec. 2, 2016, Simpkins was sentenced to 72 months in prison, to pay $450,000 in restitution, to forfeit $150,000 and pay a $50,000 fine.  

A criminal complaint is merely an accusation, and the accused is presumed innocent unless proven guilty in a court of law.

DCIS, NCIS and the Defense Contract Audit Agency are investigating the case.  Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case.  

February 19, 2017 | Permalink | Comments (0)

Saturday, February 18, 2017

IRS Summarizes "Dirty Dozen" List of Tax Scams for 2017

Here is a recap of this year's "Dirty Dozen" scams:

Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill Irs_logo or refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2017-15)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2017-19)

Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely cautious and do everything they can to avoid being victimized. (IR-2017-22)

Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. There are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. (IR-2017-23)

Fake Charities: Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. has the tools taxpayers need to check out the status of charitable organizations. (IR-2017-25)

Inflated Refund Claims: Taxpayers should be on the lookout for anyone promising inflated refunds. Be wary of anyone who asks taxpayers to sign a blank return, promises a big refund before looking at their records or charges fees based on a percentage of the refund. Fraudsters use flyers, advertisements, phony storefronts and word of mouth via community groups where trust is high to find victims. (IR-2017-26)

Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is usually limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims often involve failures to participate in or substantiate qualified research activities and/or satisfy the requirements related to qualified research expenses. (IR-2017-27)

Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation to falsely inflate deductions or expenses on their returns to pay less than what they owe or potentially receive larger refunds. Think twice before overstating deductions such as charitable contributions and business expenses or improperly claiming credits such as the Earned Income Tax Credit or Child Tax Credit. (IR-2017-28)

Falsifying Income to Claim Credits: Don’t invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers are sometimes talked into doing this by con artists. Taxpayers should file the most accurate return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing large bills to pay back taxes, interest and penalties. In some cases, they may even face criminal prosecution. (IR-2017-29)

Abusive Tax Shelters: Don’t use abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2017-31)

Frivolous Tax Arguments: Don’t use frivolous tax arguments to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims even though they have been repeatedly thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2017-33)

Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program  to enable people to catch up on their filing and tax obligations. (IR-2017-35)

February 18, 2017 in Tax Compliance | Permalink | Comments (0)

Friday, February 17, 2017

Taxing Oil, Gas and Minerals Across Borders Poses Challenges for Developing Nations

See the full article from the IMF here by Philip Daniel, Michael Keen, Artur Swistak, and Victor Thuronyi

Seventy percent of the world’s poorest people live in countries rich in oil, natural gas or minerals, making effective taxation of these extractive industries critical to alleviating poverty IMF_Text_Logoand achieving sustained growth. But national borders make that task much harder, opening possibilities for tax avoidance by multinationals and raising tough jurisdictional issues when resource deposits cross frontiers.

Familiar problems, but much larger

The countries with the most resources are commonly not those that most use them. So it’s no surprise that some of the world’s first multinationals were extractive companies, such as Standard Oil or Royal Dutch Shell, or that multinationals account for the vast bulk of government revenue from the sector (except where state companies predominate). All the techniques of tax avoidance associated with multinational activities—the subject of the G20-OECD project on Base Erosion and Profit Shifting (BEPS)—arise in the extractive industries. But while the problems there are similar to those found in other sectors, they are often on a larger scale—and with some distinctive twists.

See the full article from the IMF here

February 17, 2017 in Economics | Permalink | Comments (0)

Thursday, February 16, 2017

Asia’s Ascent into the Global Economy

See podcast here by iMFdirect

Barry Eichengreen says what happens in China doesn’t stay in China anymore.

Eichengreen is Professor of Political Science at the University of California, Berkeley, and in this podcast he characterizes the emergence of Asia, and of China in particular, as “the most important economic event affecting the world in the last quarter century.”

While the region struggles with distribution and inequality issues, Eichengreen says Asia, has managed to lift millions, if not billions of people out of poverty and into middle income IMF_Text_Logostatus.


  • Throughout the conversation, Eichengreen underlines the important linkages between Asian economies and the global financial system, and at one point suggests the very nature of Asian markets could work to their advantage in today’s economic environment. “Asian markets by and large are smaller and less liquid than so called Western markets. So they have room to run and they need to use it.”
  • Eichengreen also talks about the significance of the Chinese Renminbi being added to the IMF’s Special Drawing Rights basket, but says more needs to be done in order to internationalize the currency. “What would really make the Renminbi a true international currency is if China developed deep and liquid financial markets that made holding Renminbi denominated currencies, doing cross-border business with the currency, attractive not only to residents but to foreigners as well.”

PODCAST on IMF's webpage here

February 16, 2017 in Economics | Permalink | Comments (0)

Wednesday, February 15, 2017

How May the U.S. Leverage FATCA to Incentivize Good Tax Administrations Among the World of Black Hat and Grey Hat Governments? A Carrot & Stick Policy Proposal


Professor William Byrnes examines whether it is prudent for taxpayers to trust the governments of the 117 countries that scored a fifty or below on Transparency International’s Irs_logocorruption index. The complete information system invoked by the Foreign Account Tax Compliance Act (FATCA) encourages, even prolongs, the bad behavior of black hat governments by providing fuel (financial information) to feed the fire of corruption and suppression of rivals. Professor Byrnes recommends that the United States leverage a “carrot-stick” policy tool to incentivize bad actors to adopt best tax administration practices.  Article download at

Keywords: FATCA, Common Reporting Standards, OECD, Exchange of Information, Taxpayer Rights, IGA, corruption


Lexis Guide to FATCA and Common Reporting Standard Compliance – 2017 

Over 1,800 pages of analysis of the FATCA and CRS compliance challenges,  79 chapters by FATCA and CRS contributing experts from over 50 countries. Besides in-depth, practical analysis, the 2017 edition includes examples, charts, timelines, links to source documents, and compliance analysis pursuant to the IGA, CRS agreement, and local regulations for many financial centers.   This fifth edition will provide the financial enterprise’s FATCA and CRS compliance officer the tools for developing and maintaining a best practices compliance strategy.  No filler of forms and regs – it’s all beef !  See Lexis’ order site and request a copy of the forthcoming 2016 edition –

February 15, 2017 in OECD | Permalink | Comments (0)

Tuesday, February 14, 2017

Former University Business Professor sentenced to Prison for Hiding over $220 Million in Offshore Banks

Evaded More than $18 Million in Federal and State Taxes over 15 years

A now retired business school professor, who amassed a $220 million fortune in secret foreign accounts, was sentenced to Irs_logoseven months in prison today for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia. He also has been assessed and paid a $100 million civil penalty for his concealment of these accounts.

“For 15 years, Dan Horsky stashed assets and hid income offshore in secret bank accounts,” said Acting Deputy Assistant Attorney General Goldberg. “That scheme came to an abrupt end when IRS special agents came knocking on his door. The days of hiding behind shell corporations and foreign bank secrecy laws are over. Now is the time for accountholders to come in, accept responsibility, and help ensure that the lawyers, financial advisers and other professionals who actively facilitated offshore evasion also are held accountable.”

“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said U.S. Attorney Boente. “Horsky went to great lengths to hide assets overseas in order to avoid paying his share of taxes to the IRS. Today’s sentence shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”

“Mr. Horsky’s criminal actions to evade his federal income tax obligations were particularly flagrant and unacceptable,” said Chief Richard Weber of IRS Criminal Investigation (CI). “Together with our law enforcement partners, IRS-CI will continue to unravel complex financial transactions and hold those accountable who hide assets offshore and dodge the tax system. IRS-CI special agents are the best financial investigators and we will continue to follow the money trail wherever it may lead.”

According to documents filed with the court and statements made during the sentencing hearing, Dan Horsky, 71, formerly of Rochester, New York, is a citizen of the United States, the United Kingdom and Israel who served for more than 30 years as a professor of business administration at a university located in New York. Beginning in approximately 1995, Horsky invested in numerous start-up companies, virtually all of which failed. One investment in a business referred to as Company A, however, succeeded spectacularly. In 2000, Horsky transferred his investments into a nominee account in the name of “Horsky Holdings” at an offshore bank in Zurich, Switzerland (the “Swiss Bank”) to conceal his financial transactions and accounts from the IRS and the U.S. Treasury Department.

In 2008, Horsky received approximately $80 million in proceeds from selling Company A’s stock. Horsky filed a fraudulent 2008 tax return that underreported his income by more than $40 million and disclosed only approximately $7 million of his gain from the sale. The Swiss Bank opened multiple accounts for Horsky to assist him in concealing his assets: including one small account for which Horsky admitted that he was a U.S. citizen and resident and another much larger account for which he claimed he was an Israeli citizen and resident. Horsky took some of his gains from selling Company A’s stock and invested in Company B’s stock. By 2015, Horsky’s offshore holdings hidden from the IRS exceeded $220 million.

Horsky directed the activities in his Horsky Holdings’ account and the other accounts he maintained at the Swiss Bank, despite the fact that he made no effort to conceal that he was a U.S. resident. In 2012, Horsky arranged for an individual referred to as Person A to take nominal control over his accounts at the Swiss Bank because the bank was closing accounts controlled by U.S. persons. The Swiss Bank later helped Person A relinquish that individual’s U.S. citizenship, in part to ensure that Horsky’s control over the offshore accounts would not be reported to the IRS. In 2014, Person A filed a false Form 8854 (Initial Annual Expatriation Statement) with the IRS that failed to disclose his net worth on the date of expatriation, failed to disclose his ownership of foreign assets, and falsely certified under penalties of perjury that he was in compliance with his tax obligations for the five preceding tax years.

Horsky’s tax evasion scheme ended in 2015 when IRS special agents confronted him at home regarding his concealment of his foreign financial accounts.

Horsky willfully filed fraudulent federal income tax returns that failed to report his income from, and beneficial interest in and control over, his foreign financial accounts. In addition, Horsky failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up and through 2011, and also filed fraudulent 2012 and 2013 FBARs. In total, in a 15-year tax evasion scheme, Horsky evaded more than $18 million in income and gift tax liabilities.

In addition to the term of prison imposed, Horsky was ordered to serve one year of supervised release and to pay a fine of $250,000. As part of his plea agreement, Horsky also paid a penalty of $100 million dollars to the U.S. Treasury for failing to file, and filing false, FBARs and paid over $13 million in taxes owed to the IRS.

Acting Deputy Assistant Attorney General Stuart M. Goldberg and U.S. Attorney Boente commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who are prosecuting this case.

February 14, 2017 | Permalink | Comments (0)

Saturday, February 11, 2017

FTC Acting Chairman Ohlhausen Names Thomas Pahl Acting Director of the Agency’s Bureau of Consumer Protection

Federal Trade Commission Acting Chairman Maureen K. Ohlhausen announced today that she has appointed Thomas Pahl, a partner at the Washington, D.C. law firm of Arnall Thomas Pahl FTCGolden Gregory LLP, to be the Acting Director of the FTC’s Bureau of Consumer Protection.

 “Tom’s career demonstrates his continuing commitment to protecting consumers through active enforcement and advocacy that promotes a free and honest marketplace,” said Acting Chairman Ohlhausen. “His thoughtful approach will help ensure consumers benefit from thriving competition and innovation. Tom’s talent, deep consumer protection experience, and strong principles make him perfect to lead the Bureau of Consumer Protection, and I’m very pleased to have him aboard.”

Pahl is rejoining the FTC, having served in a number of different roles starting in 1990, including management stints in the FTC’s Bureau of Consumer Protection as Assistant Director in the Division of Advertising Practices and the Division of Financial Practices. He also advised top agency officials on consumer protection matters. For three years, he advised Reagan appointee and FTC Commissioner Mary Azcuenaga. And he later served for four years as an attorney advisor for Republican FTC Commissioner Orson Swindle. 

Pahl previously served a detail to the United States Senate Judiciary Committee under the leadership of Chairman Orrin Hatch, focusing on antitrust and consumer privacy issues. Pahl also has worked as an adjunct professor of law at George Mason University’s Antonin Scalia Law School, and is a member of the Federalist Society.

More recently, Pahl has worked on consumer financial protection issues (especially credit reporting and debt collection issues) as a partner at Arnall Golden Gregory LLP, and on debt collection issues at the Consumer Financial Protection Bureau.

Pahl is a native Minnesotan who earned a B.A. in Economics, summa cum laude from the College of St. Thomas in St. Paul, Minnesota. He earned his law degree, cum laude, from Northwestern University School of Law in Chicago, Illinois. Afterwards, he returned to Minnesota to clerk for Hon. D.D. Wozniak, the Chief Judge of the Minnesota Court of Appeals, and worked as a litigator a large Minneapolis law firm before starting his career at the FTC.

February 11, 2017 in Financial Regulation | Permalink | Comments (0)

Friday, February 10, 2017

OECD invites taxpayer input on peer reviews of Dispute Resolution (BEPS Action 14)

OECD_globe_10cm_HD_4cThe Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the BEPS Action Plan was launched in December 2016. The OECD is now gathering input
for the Stage 1 peer reviews of Austria, France, Germany, Italy, Liechtenstein, Luxembourg and Sweden, and invites taxpayers to submit input on specific issues relating to access to MAP, clarity and availability of MAP guidance and the timely implementation of MAP agreements for each of these jurisdictions using the taxpayer input questionnaire. As taxpayers are the main users of the MAP this input is key for the review process and we encourage taxpayers to complete the questionnaire and return it (in Word format) by 27 February 2017 at the latest.

» Read the press release
BEPS Action 14 peer review and monitoring process

February 10, 2017 in BEPS | Permalink | Comments (0)

Thursday, February 9, 2017

OECD releases peer review documents for assessment of BEPS minimum standards (Actions 5 and 13)

OECD releases peer review documents for assessment of BEPS minimum standards (Actions 5 and 13)

Today the OECD released key documents, approved by the Inclusive Framework on BEPS, which will form the basis of thepeer review of Action 13 Country-by-Country Reporting and for the peer review of the Action 5 transparency framework.

The Action 13 standard on Country-by-Country Reporting and the Action 5 standard for the compulsory spontaneous exchange of information on tax rulings (the "transparency framework") are two of the four BEPS minimum standards. Each of the four BEPS minimum standards is subject to peer review in order to ensure timely and accurate implementation and thus safeguard the level playing field. All members of the Inclusive Framework on BEPS commit to implementing the minimum standards and participating in the peer reviews.

The documents released today form the basis on which the peer review processes will be undertaken. The compilations include the Terms of Reference which sets out the criteria for assessing the implementation of the minimum standard, and the Methodology which sets out the procedural mechanism by which jurisdictions will complete the peer review, including the process for collecting the relevant data, the preparation and approval of reports, the outputs of the review and the follow-up process.

More information on the peer review and monitoring process:

February 9, 2017 in BEPS | Permalink | Comments (0)

Wednesday, February 8, 2017


On Friday, a United States Magistrate Judge in the Eastern District of Pennsylvania issued an important opinion in a dispute between the United States and Google over whether Logo_of_the_FBI_Counterterrorism_DivisionGoogle must comply with warrants issued by United States judges.  The matter involved two warrants to search Google accounts belonging to suspected criminals in the United States who communicated with others in the United States.  Google refused to fully comply with the warrants, asserting that it could not be compelled to disclose data unless it knew the data was actually located in the United States.  The Magistrate Judge ordered Google to comply with the search warrants, specifically finding that no seizure occurs outside the United States and that the search occurs in Pennsylvania.

As background:  When the government has probable cause to believe that an e-mail account contains evidence of a crime, it can apply for a search warrant from a federal court.  If a judges finds that the government has shown probable cause, that judge then issues a search warrant to the provider to produce the data.  The search warrant is then served on an e-mail provider (such as Google or Microsoft), who then must, under law, produce to the government the e-mails that the warrant describes.  The government’s ability to do this is critical to criminal investigations into crimes as varied as fraud, computer hacking, terrorism, murder, kidnapping, organized crime, sexual abuse or exploitation of children, identity theft and more.  

Friday’s opinion involved an investigation of crimes that occurred in the United States, were committed by United States citizens, and were committed against a United States victims.  Those crimes were facilitated by sending e-mails from senders inside the United States to recipients also inside the United States.  But Google only partially complied with the search warrants, refusing to produce all of the information in its possession, custody and control.  Google instead limited its production to records that it said it could determine were stored within the United States.    

Google argued that search warrants issued in the United States can only compel Google to produce data stored in the United States.  As Google has explained, Google stores individual data files in multiple data “shards,” each separate shard being stored in separate locations around the world.  Google cannot determine where its separate data shards are stored around the world at any given time.  Google also moves that data around the world using computer algorithms that decide where data is stored at any given moment.  As a consequence, Google’s argument would mean that data that happens to be outside the United States – even data that the government knows about and describes in a search warrant affidavit – is never accessible.  Not with a warrant; not with a treaty request to another country; not with anything. And even assuming that the location could be determined, the Google algorithm could move it to another country before legal process could reach it.  

Thankfully, the magistrate judge rejected that argument.  He rejected any notion that the warrant asked Google to do anything outside the United States: “Google will gather the requested undisclosed data on its computers in California, copy the data in California, and send the data to law enforcement agents in the United States, who will then conduct their searches in the United States.”

The department has also been litigating this issue against Microsoft.  In July 2016, the U.S. Court of Appeals for the Second Circuit, in the “Microsoft Ireland” case, dealt a harmful blow to the ability of U.S. law enforcement to investigate and prosecute serious crime and protect the American public.  The decision broke with almost two decades of settled understanding when it held that a U.S.-based company – in this case, Microsoft – can refuse to comply with a U.S. court-authorized disclosure warrant, issued upon a showing of probable cause, merely because the company chooses to store the electronic data sought by the warrant on its own overseas servers.  Put simply, it allowed U.S.-based service providers to frustrate important criminal and national security investigations, whether purposefully or inadvertently, by adopting a business practice of storing e-mail content outside the United States.

Because of the public safety consequences, the department has litigated the ability to use warrants in accordance with U.S. law.  We asked that the case be reheard by the entire Second Circuit en banc.  Despite these weighty concerns, on Jan. 24, 2017, the Second Circuit issued an important opinion denying our petition for rehearing.  Judge Carney, explaining the Circuit’s decision not to grant review, acknowledged that because of the decision, “U.S. law enforcement will less easily be able to access electronic data that a magistrate judge in the United States has determined is probably connected to criminal activity,” and “my panel colleagues and I readily acknowledge the gravity of this concern,” but believe the governing statute required it.  Judge Raggi, dissenting from the decision not to rehear the case, observed that “On the panel’s reasoning, if on Sept. 10, 2001, the government had been able to show probable cause to believe that Mohamed Atta, Abdul Aziz al Omari, etc., were communicating electronically about an imminent, devastating attack on the United States, and that Microsoft possessed those emails, no federal court could have issued a … warrant compelling Microsoft to disclose those emails if it had stored them overseas, even though its employees would not have had to leave their desks in Redmond, Washington, to retrieve them.”

We recognize the extraordinary importance to public safety that comes from allowing the government, with a warrant lawfully issued by a neutral magistrate after a showing of probable cause to believe an e-mail account contains evidence of a crime, to gain access to that account.  Friday’s court opinion is an important step in the department’s ongoing efforts to ensure that providers uphold their obligations to public safety by complying with lawful warrants. 


February 8, 2017 | Permalink | Comments (0)