International Financial Law Prof Blog

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

Thursday, May 31, 2018

Vienna International Tax program seeks to hire Project assistant

Dear Colleagues!
We are pleased to announce that the Institute for Austrian and International Tax Law is currently searching for a new Project assistant for 35-40 hours starting August 16th 2018.
Please find more information on the position and the Institute at

If you would like to apply, or know someone who would be interested we would appreciate you forwarding this job offer. Please send your application - only online - by June 20th, 2018 at (code 3652). If you have any questions, please do not hesitate to contact Ms. Nina Nimmerrichter (
Kind regards
Michael Lang / Alexander Rust / Josef Schuch / Claus Staringer / Pasquale Pistone / Alfred Storck / Jeffrey Owens / Maria Wimmer

May 31, 2018 | Permalink | Comments (0)

Wednesday, May 30, 2018

Corporate tax avoidance: Transparency rules adopted for tax intermediaries

On 25 May 2018, the Council adopted rules aimed at boosting transparency to prevent aggressive cross-border tax planning.

The directive targets intermediaries such as tax advisors, accountants and lawyers that design and/or promote tax planning schemes. It will require them to report schemes that are potentially aggressive.

The information received will be automatically exchanged through a centralised database. Penalties will be imposed on intermediaries that do not comply.

"The new rules are a key part of our strategy to combat corporate tax avoidance ", said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency. “With greater transparency, risks will be detected at an earlier stage and measures taken to close down loopholes before revenue is lost."

The directive was adopted at a meeting of the Economic and Financial Affairs Council, without discussion. Member States will have until 31 December 2019 to transpose it into national laws and regulations.

May 30, 2018 in BEPS | Permalink | Comments (0)

Tuesday, May 29, 2018

Sanctions and Anti-Money Laundering Act receives Royal Assent

Her Majesty The Queen has given Royal Assent to the Sanctions and Anti-Money Laundering Act.   Download UK Sanctions and AML Act 2018

Following this news, Foreign Secretary Boris Johnson said:

Royal Assent for the Sanctions and Anti-Money Laundering Act is an important moment for the UK. It is the first of the bills which prepares for life after our exit from the EU to complete its passage through Parliament.

Thanks to this new law, once we have left the EU, we will have full control of our own sanctions policy again. That will give us the power to impose sanctions, including for human rights abuses.

Sanctions are a key foreign policy and national security tool for the UK, and the new legislation will allow the UK to act in line with our own priorities, as well as with our international partners.

It will also provide us with the power to amend and update anti-money laundering and counter-terrorist finance legislation, allowing the Government to keep pace with changing international standards and practices, and help to protect the UK from money laundering and terrorist financing.

While we are leaving the EU, we are not leaving Europe, and we will continue to have shared values, interests, and threats with our European and international partners. This makes continued foreign policy cooperation, including on sanctions, in all our interests.

I’m also proud that we have added a “Magnitsky amendment” to this legislation. The UK Government is committed to promoting and strengthening universal human rights, holding to account those responsible for the worst violations. This legislation also makes clear that individuals or entities can be sanctioned for the purposes of deterring, or providing accountability for, gross human rights abuses or violations.


May 29, 2018 in AML | Permalink | Comments (0)

Saturday, May 26, 2018

FATCA Legislation and its Application at International and EU Level

This study commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the PETI Committee, analyzes FATCA legislation and its application at international and EU level: it first provides a global overview on exchange of tax information and of the FATCA mechanisms applied through intergovernmental agreements. The study then describes the extraterritorial nature and negative externalities of FATCA, in particular its impact on U.S. citizens abroad and the potential conflicts with EU law, with specific attention to the right of FATCA data protection under the GDPR. It concludes with suggestions for bilateral and unilateral EU-U.S. policies, with final remarks on a multilateral approach.

Download IPOL_STU(2018)604967_EN


May 26, 2018 in GATCA | Permalink | Comments (0)

Friday, May 25, 2018

Treasury, IRS To Issue Proposed Rule on State and Local Tax Deductions

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) will issue proposed regulations in the near future addressing legislation adopted or being considered by state legislatures that allow taxpayers to receive a credit against their state and local taxes for contributions to certain organizations or funds designated by the state. In addition to cutting income tax rates, expanding the child tax credit, and nearly doubling the standard deduction, the Tax Cuts and Jobs Act limited the amount of state and local taxes an individual can deduct in a calendar year to $10,000.    Download IRS prop state tax deductions trick by states

In the notice issued today, Treasury and the IRS informed taxpayers that proposed regulations will be issued addressing the deduction of contributions to state and local governments, and other state-specified funds, for federal tax purposes. The proposed regulations will make clear that the Internal Revenue Code, not the label used by states, governs the federal income tax treatment of such transfers. The proposed regulations will also assist taxpayers in understanding the relationship between the federal charitable contribution deduction and the new statutory limitation on the deduction of state and local income taxes.

May 25, 2018 in Tax Compliance | Permalink | Comments (0)

Thursday, May 24, 2018

IRS' Confiscatory Percentage Based FBAR Penalties Ruled Illegal By Court

Jack Townshend analyzes the following case

In United States v. Colliot (W.D. Texas No. AU-16-CA-01281-SS), a case brought by the U.S. to obtain judgment on an FBAR willful penalty, the Court granted Colliot's motion for summary judgment, holding that the IRS cannot assess a willful penalty in excess of $100,000 despite the statute allowing a penalty assessment of the higher of $100,000 or 50% of the maximum amount in the unreported foreign account(s).  The order granting summary judgment is here.  This is a major holding which will surely follow, could dramatically affect the landscape for cases in the pipeline until the IRS acts to change the regulations landscape on which the decision was based.

Read his analysis at Federal Tax Crimes blog.

May 24, 2018 in Tax Compliance | Permalink | Comments (0)

Wednesday, May 23, 2018

Institute for Austrian and International Tax Law hiring research and teaching associate position

We are pleased to remind you again that the Institute for Austrian and International Tax Law is advertising for a research and teaching associate position. The deadline for applications is May 30, 2018.
We would be delighted if you applied for this position and please kindly distribute this announcement to other qualified colleagues.
For more information on the position, please see our website under "Further Information": If you would like to apply, or you know somebody who may be interested, please send your application to Ms. Theodora Stergidou (
Kind regards,

Michael Lang / Alexander Rust / Josef Schuch / Claus Staringer / Pasquale Pistone / Alfred Storck / Jeffrey Owens / Maria Wimmer

May 23, 2018 in Academia | Permalink | Comments (0)

Guernsey Alarmed by UK Dispensing with Constitutional Procedures for Disclosing Beneficial Owners of Corporations and Trusts

Guernsey’s status as a mature jurisdiction and its strong record and clear position on the transparency of beneficial ownership has been set out by its Chief Minister.  

Deputy Gavin St Pier used his address to Guernsey’s parliament to confirm that Guernsey’s constitutional relationship with the UK would remain unchanged by Brexit, and state the determination to defend the island’s political independence. He also set out how Guernsey meets all international standards on fighting financial crime and its commitment to protecting privacy for individuals’ legitimate personal interests.

In his speech, he said: “Guernsey is a well-regulated, co-operative jurisdiction playing an important role in international capital markets. Our legitimate current policy stance on the register of beneficial ownership meets the agreed international standards and maintains an effective balance between transparency and privacy.”

Guernsey, alongside other Crown Dependencies the Isle of Man and Jersey, worked with UK Government to clarify its constitutional position following a number of proposed amendments to the UK’s Sanctions and Anti-Money Laundering Bill, passing through the House of Commons earlier this month. These amendments sought to impose the UK’s domestic policy on the islands – an approach that is incompatible with the long-standing constitutional relationship.

Deputy St Pier restated the “long-standing constitutional principle that Westminster does not legislate for us without our consent on purely domestic matters”.

Guernsey is not an independent state in international law but has competence over its domestic affairs and is economically self-sufficient, paying no taxes to the UK or EU, and receiving no contribution from UK or EU revenues. Guernsey’s link to the UK is through the Crown – and not through the UK government.

“The history is important because it sets Guernsey and the Crown Dependencies firmly apart from the constitutional position of the Overseas Territories,” Deputy St Pier added.

He said he was concerned that a number of UK MPs had “seemed prepared to dispense with established constitutional conventions” in seeking to impose UK policy in what he called a move which “gave serious consideration to riding roughshod over centuries of constitutional convention, our ancient rights and our democratic process”.

Deputy St Pier said Guernsey should be proud of its role in the international financial system and on regulatory standards.

“Our standards and record are exemplary, and we can hold our head high in any international forum on the topic,” he said. “There is much that other jurisdictions could learn from us. We have no intention of being passive or defensive. On the contrary, we will be proactive and proud when it is appropriate to be so.”

Deputy St Pier stated that the Bailiwick’s register provided the required policy outcome for the UK authorities when it comes to fighting financial crime a fact that was supported by the UK government through a Home Office review.

Information was shared promptly with authorities with a legitimate need to know and the information was up to date, accurate, and verified, unlike the UK’s register, he said.

“We will move to a public register of beneficial ownership if that becomes an international standard,” said Deputy St Pier. “It must be a standard agreed by all jurisdictions – there must be a level playing field.”

“Public registers are not the agreed policy of the G20 countries – we are not the only well-respected jurisdiction to have this policy position. Whatever our detractors say, we are not a 'secrecy jurisdiction' – but we do recognise the legitimate right to personal privacy.”

Deputy St Pier advised that Guernsey would volunteer evidence to a new inquiry into tax avoidance and evasion by the House of Commons Treasury Select Sub-Committee in order to reinforce this point to the UK Parliament.

May 23, 2018 in Financial Centers | Permalink | Comments (0)

Tuesday, May 22, 2018

inCEN Beneficial Ownership Requirements for Legal Entity Customers of Certain Financial Products and Services with Automatic Rollovers or Renewals

The Financial Crimes Enforcement Network (FinCEN) is issuing this ruling to provide a 90-day limited exceptive relief to covered financial institutions from the obligations of the Beneficial Ownership Requirements for Legal Entity Customers (31 CFR § 1010.230) (Beneficial Ownership Rule) with respect to certain financial products and services that automatically rollover or renew (i.e., certificate of deposit (CD) or loan accounts) and were established before the Beneficial Ownership Rule’s Applicability Date, May 11, 2018. This exception begins, retroactively, on May 11, 2018, and will expire on August 9, 2018. During this time, FinCEN will determine whether and to what extent additional exceptive relief may be appropriate for such financial products and services that were established before May 11, 2018, but are expected to rollover or renew after such date.

Consistent with the definition of “account” in the Customer Identification Program (CIP) rules and subsequent interagency guidance, each time a loan is renewed or a certificate of deposit is rolled over, the bank establishes another formal banking relationship and a new account is created. As clarified in the Customer Due Diligence Frequently Asked Questions (CDD FAQs) published on April 3, 2018, covered financial institutions are required to obtain information on the beneficial owners of a legal entity that opens a new account for each new formal banking relationship established, even if the legal entity is an existing customer. FinCEN understands that some covered institutions have not treated such rollovers or renewals as new accounts and have established automatic processes to continue the banking relationship with the customer.

These covered financial institutions have expressed concern regarding their ability to comply with the Beneficial Ownership Rule with respect to such accounts. FinCEN believes that further consideration of this issue is appropriate and is, therefore, granting this temporary exception with respect to collecting beneficial ownership on certain financial products and services (i.e., CD and loan accounts) that automatically rollover or renew and were established before the Beneficial Ownership Rule’s Applicability Date.

Download FinCEN Ruling CD and Loan Rollover Relief_FINAL 508

May 22, 2018 in AML | Permalink | Comments (0)

Monday, May 21, 2018

Switzerland remains the world’s largest wealth management centre for international assets

Download Ch-fs-1800914_Deloitte-wealth-management-Ranking-2018

Swiss Info reports: A total of $1.84 trillion (CHF1.85 billion) of international assets were managed in Switzerland at the end of 2017, says the latest Deloitte Wealth Management Centre Ranking, published on Friday. Britain ($1.79 trillion) and the United States ($1.48 trillion) follow closely behind. Both countries have significantly increased their international market volume in the past seven years, by 9% and 48% respectively. Read the full story and analysis here



May 21, 2018 in Wealth | Permalink | Comments (0)

Sunday, May 20, 2018

Lindsay Columbo: How do we reconcile UBO due diligence and GDPR obligations?

excellent article in FCPA blog: ... a financial institution identifying and verifying UBO information of EU data subjects will need specifically identify and address its obligations as a data processor.

Under the GDPR, data processors must have a legal basis for processing the personal data, as well as explicit consent to process the data from the data subject. 

Read the FCPA blog here

May 20, 2018 in AML | Permalink | Comments (0)

Saturday, May 19, 2018

Rabobank NA Sentenced for Conspiring to Impair, Impede, and Obstruct Its Primary Regulator

Rabobank National Association (Rabobank), a Roseville, California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., was sentenced today by U.S. District Judge Jeffrey T. Miller of the Southern District of California for impairing, impeding and obstructing its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (the OCC), by concealing deficiencies in its anti-money laundering (AML) program and for obstructing the OCC’s examination of Rabobank.  Rabobank was sentenced to a two-year term of probation, and ordered to pay the statutory maximum fine of $500,000.  Additionally, as part of its guilty plea, Rabobank forfeited $368,701,259 to the United States as a result of allowing illicit funds to be processed through the bank. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman for the Southern District of California, Special Agent in Charge Dave Shaw of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Diego and Special Agent in Charge R. Damon Rowe of Internal Revenue Service Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement. 

“Rabobank’s branches on the Mexican border processed hundreds of millions of dollars in suspicious transactions likely tied to international narcotics trafficking, organized crime, and money laundering,” said Acting Assistant Attorney General Cronan.  “Instead of filing reports that would have alerted law enforcement to the suspicious activity, as required by law, the bank looked the other way and then compounded its misconduct by conspiring to cover-up its failures and deceiving its regulator.  Today’s sentence and the related forfeiture demonstrate that the Department of Justice will use all the tools at our disposal to combat drug trafficking and transnational crime—including prosecuting financial institutions that turn a blind eye to illicit proceeds moving through their customers’ accounts.” 

“The U.S. Attorney’s Office is intent on securing our border and preventing the laundering of narco-dollars through financial institutions like Rabobank,” said U.S. Attorney Braverman.  “In doing so we will safeguard our communities and protect our citizens from drug traffickers and corporate criminals alike.”

 “It is the responsibility of Homeland Security Investigations (HSI) to monitor and investigate illicit activity that exploits the global infrastructure, particularly in financial systems,” said HSI San Diego Special Agent in Charge, Dave Shaw.  “This complex investigation revealed, and Rabobank admits, that Rabobank was aware of the extreme risk involved in processing million dollar financial transactions linked to transnational crime and international money laundering – activity which plagues the southwest  border.  Today’s sentencing and the significant forfeitures in this case sends a strong message to financial institutions that illicit financial activity inside banking institutions will not be tolerated.”

“Rabobank’s sentencing today is a victory for all Americans and sends a strong message about the need for transparency in banking and ultimately contributes to the fight against money laundering,” said IRS-CI Special Agent in Charge Rowe. “IRS-Criminal Investigation works diligently with our law enforcement partners to ensure funds obtained through illegal means do not find their way into our financial institutions.”

On Feb. 7, Rabobank pleaded guilty to conspiracy to defraud the United States and to corruptly obstruct an examination of a financial institution.  Specifically, Rabobank admitted to conspiring with several former executives to defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank and to obstruct the OCC’s 2012 examination of Rabobank’s Bank Secrecy Act (BSA)/AML compliance program.  In connection with that guilty plea, Rabobank admitted that between 2009 and 2012 it implemented BSA/AML policies and procedures that precluded and suppressed its investigations into potentially suspicious transactions near the U.S.-Mexico border, much of which was conducted by customers and through accounts that Rabobank had previously designated “High-Risk.” 

As a result of its BSA/AML failures, Rabobank admitted that certain customer accounts were involved in not less than $368,701,259 in suspicious transactions that were either unreported or untimely reported to the Financial Crimes Enforcement Network (FinCEN), as required by the BSA.  These transactions included high-volume cash deposits and withdrawals, check transactions, electronic transfers, and wire transfers that were consistent with illegal activity such as trade-based money laundering, bulk cash smuggling, structuring, and the black market peso exchange.

According to its statement of facts, Rabobank’s branches in Imperial County, California were heavily dependent on cash sourced from Mexico – cash the bank knew was likely tied to narcotics trafficking and organized crime.  In particular, Rabobank’s Calexico, California branch, located approximately two blocks from the U.S.-Mexico border, was the highest performing branch in the Imperial Valley region due to its receipt of cash from Mexico.  Rabobank continued soliciting cash-intensive customers from Mexico, while failing to employ appropriate BSA/AML policies and procedures to address the heightened risk, until approximately May 2013, when Rabobank placed a moratorium on originating new account relationships for Mexico-based businesses entities.

Rabobank also admitted that the bank, through at least three executives, knowingly obstructed the OCC’s 2012 examination by responding to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program and by making false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant that described the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program.  In furtherance of the scheme to defraud the OCC, Rabobank also demoted or terminated two RNA employees who provided information to the OCC regarding Rabobank’s BSA/AML deficiencies. 

The investigation was conducted by HSI, IRS-CI, and the Financial Investigations and Border Crimes Task Force (the FIBC), a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture (TEOAF).  The investigation occurred in parallel with regulatory investigations by the OCC, Office of General Counsel, and FinCEN, Enforcement Division.  The case is being prosecuted by Trial Attorneys Kevin G. Mosley and Maria K. Vento of the Criminal Division’s Money Laundering and Asset Recovery Section, Bank Integrity Unit, and Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher and David J. Rawls of the Southern District of California. 

May 19, 2018 in AML | Permalink | Comments (0)

Friday, May 18, 2018

Chairman of Macau Real Estate Development Company Sentenced to Prison for Role in Scheme to Bribe United Nations Ambassadors to Build A Multi-Billion Dollar Conference Center

The chairman of a real estate development company was sentenced to 48 months in prison and three years of supervised release for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Geoffrey S. Berman of the Southern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge James D. Robnett of the IRS Criminal Investigation’s (IRS-CI) New York Field Office made the announcement.

Ng Lap Seng, aka “David Ng,” 69, of Macau, China, was sentenced by U.S. District Judge Vernon S. Broderick of the Southern District of New York.  In addition to his prison sentence, Judge  Broderick ordered Ng to pay a $1 million fine and $302, 977 in restitution to the United Nations.  He also ordered a forfeiture money judgment of $1.5 million in forfeiture. Ng must report to the U.S. Marshals Service by July 10 to start his prison sentence.  Ng was convicted on July 27, 2017, after a five-week trial of two counts of violating the Foreign Corrupt Practices Act, one count of paying bribes and gratuities, one count of money laundering and two counts of conspiracy.

“Corruption at any level of government undermines the rule of law and cannot be tolerated,” said Acting Assistant Attorney General Cronan. “But corruption is especially corrosive when it occurs at an international body like the United Nations.  By paying bribes to two U.N. ambassadors to advance his interest in obtaining formal support for the Macau conference center project, Ng Lap Seng tried to manipulate the functions of the United Nations.  The sentence handed down today demonstrates that those who engage in corruption will pay a heavy price and serves as a reminder that no one stands above the law.”

“Billionaire Ng Lap Seng corrupted the highest levels of the United Nations in pursuit of a multibillion-dollar real estate deal in Macau,” said U.S. Attorney Berman. “Ng exploited a center for international diplomacy as an instrument for his greedy intentions.  This Office is committed to policing official corruption wherever it may be found.”

“Gaining the upper hand in a business venture by engaging in corrupt practices is bribery in its purest form. Today, Ng Lap Seng has learned the price he will have to pay for his actions,” said Assistant Director in Charge Sweeney. “I commend the investigators and prosecutors who continue to work together at home and abroad to vigorously enforce the law within the confines of the Foreign Corrupt Practices Act.”

“No matter if money is funneled through New York corporations or transferred offshore, IRS-CI is always ready to follow the money,” said IRS-CI Special Agent-in-Charge Robnett. “Today’s sentencing shows that IRS-CI is committed to rooting out public corruption by investigating individuals who misuse their positions of public trust for personal financial gain.”

According to the evidence presented at trial, Ng, the chairman of the Sun Kian Ip Group, conspired with and paid bribes to Francis Lorenzo, a former UN Ambassador from the Dominican Republic, and John W. Ashe, the late former Permanent Representative of Antigua and Barbuda to the UN and the 68th President of the UN General Assembly (UNGA).  With the assistance of Jeff C. Yin, an accountant and co-conspirator who worked with Ng and others and previously pleaded guilty to conspiring to defraud the United States, Ng orchestrated a scheme with the principal objective of obtaining the formal support of the UN for a multi-billion dollar facility that Ng hoped to build in Macau using the Sun Kian Ip Group (the “Macau Conference Center”).  Ng wanted the Macau Conference Center to serve as a location for meetings, discussions, forums, and other events associated with the UN.  In particular, he wanted it to serve as the permanent home of the annual “Global South-South Development Expo,” which is run by the UN Office for South-South Cooperation, and is hosted in a different country or city every year.

The trial evidence showed that Ng bribed Ambassador Ashe and Ambassador Lorenzo (together, the “Ambassadors”) in exchange for their agreement to use their official positions to advance Ng’s interest in obtaining formal UN support for the Macau Conference Center.  As the evidence demonstrated at trial, Ng paid the Ambassadors in a variety of forms.  For example, Ng appointed Ambassador Lorenzo as the President of South-South News, a New York-based organization — funded by Ng — which described itself as a media platform dedicated to advancing the implementation of the UN’s Millennium Development Goals, a set of philanthropic goals.  Ng provided bribe payments to Ambassador Lorenzo through South-South News by transmitting payments from Macau to a company in the Dominican Republic affiliated with Ambassador Lorenzo’s brother (the “Dominican Company”).  Through South-South News, Ng also made payments to Ambassador Ashe, including to Ambassador Ashe’s wife, who was paid in her capacity as a “consultant” to South-South News, and to an account that Ambassador Ashe had established, purportedly to raise money for his role as President of UNGA. 

According to the trial evidence, one of the actions that the Ambassadors took in exchange for bribe payments, to advance Ng’s objectives, was to submit an official document to the then-UN Secretary-General in support of the Macau Conference Center (the “UN Document”).  The UN Document claimed that there was a need to build the Macau Conference Center to support the UN’s global development goals.  Ambassador Ashe, aided by Ambassador Lorenzo, initially submitted the UN Document to the UNGA in or about late February 2012.  More than a year later, at Ng’s behest, the Ambassadors revised the UN Document to refer specifically to Ng’s company, the Macau Real Estate Development Company, as a partner in the Macau Conference Center project.  The UN Document requested that the Secretary-General circulate the UN Document “as a document of the 66th session of the General Assembly,” under a specific item of the official UNGA agenda.  The Secretary-General followed this request, thereby making the UN Document an official part of the UNGA record. 

Five other defendants have been charged in this matter.  Lorenzo and Heidi Hong Piao pleaded guilty to various charges, including bribery, and are awaiting sentencing.  Jeff C. Yin pleaded guilty to conspiracy to defraud the United States and was sentenced to seven months in prison.  Shiwei Yan pleaded guilty to bribery and was sentenced to 20 months in prison.  Co-defendant Ashe passed away in 2016 and the charges against him were dismissed. 

This case was investigated by the FBI and IRS-CI.  The Criminal Division’s Office of International Affairs provided significant assistance.  Assistant Chief David A. Last of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Daniel C. Richenthal, Janis M. Echenberg, and Douglas S. Zolkind of the Southern District of New York are prosecuting the case.  

May 18, 2018 in AML | Permalink | Comments (0)

Thursday, May 17, 2018

OECD releases decisions on 11 preferential regimes of BEPS Inclusive Framework Members

Governments are continuing to make swift progress in bringing their preferential tax regimes in compliance with the OECD/G20 BEPS standards to improve the international tax framework.

Today the Inclusive Framework released the updates to the results for preferential regime reviews conducted by the Forum on Harmful Tax Practices (FHTP) in connection with BEPS Action 5:

  • Four new regimes were designed to comply with FHTP standards, meeting all aspects of transparency, exchange of information, ring fencing and substantial activities and are found to be not harmful (Lithuania, Luxembourg, Singapore, Slovak Republic).
  • Four regimes were abolished or amended to remove harmful features (Chile, Malaysia, Turkey and Uruguay). 
  • A further three regimes do not relate to geographically mobile income and/or are not concerned with business taxation, as such posing no BEPS Action 5 risks and have therefore been found to be out of scope (Kenya and two Viet Nam regimes).

Eleven new preferential regimes are identified since the last update, bringing the total to 175 regimes in over 50 jurisdictions considered by the FHTP since the creation of the Inclusive Framework. Of the 175, 31 regimes have been changed; 81 regimes require legislative changes which are in progress; 47 regimes have been determined to not pose a BEPS risk; 4 have harmful or potentially harmful features and 12 regimes are still under review.

This update shows the determination of the Inclusive Framework to comply with the international standards. For the updated table of regime results, see

For more details, please refer to the interactive map presenting key indicators and outcomes of the OECD work on international tax matters and see an overview of the review process.

May 17, 2018 in BEPS | Permalink | Comments (0)

FCA and PRA jointly fine Barclay's Bank CEO James Staley £642,430 and announce special requirements regarding whistleblowing systems and controls

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have together fined Mr James Staley, Chief Executive of Barclays Group (Barclays), a total of £642,430. Mr Staley failed to act with due skill, care and diligence in the way he acted in response to an anonymous letter received by Barclays in June 2016.

Barclays is also now subject to special requirements by which it must report annually to the regulators detailing how it handles whistleblowing, with personal attestations required from those Senior Managers responsible for the relevant systems and controls.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, said:

“Given the crucial role of the Chief Executive, the standard of due skill, care and diligence is more demanding than for other employees.

“Mr Staley breached the standard of care required and expected of a Chief Executive in a way that risked undermining confidence in Barclays’ whistleblowing procedures. Chief Executives must act with a high degree of care and prudence at all times. Whistleblowers play a vital role in exposing poor practice and misconduct in the financial services sector. It is critical that individuals are able to speak up anonymously and without fear of retaliation if they want to raise concerns.”

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said:

“Protection for whistleblowers is an essential part of keeping the financial system safe and sound. Mr Staley’s behaviour fell below the standard we require, resulting in today’s fine and public censure. In addition, Barclays is now subject to special requirements to report to the PRA and FCA how it handles its whistleblowing cases in the coming years.”

Mr Staley attempted to identify the author of an anonymous letter received by Barclays in June 2016 that claimed to be from a Barclays shareholder. The letter contained various allegations, some of which concerned Mr Staley. Given his conflict Mr Staley should have maintained an appropriate distance; he should not have taken steps to identify the author. Mr Staley should have explicitly consulted fully with those with expertise and responsibility for whistleblowing in Barclays and sought express confirmation from them that what he wanted to do was permissible. He failed to do this.

The investigation found this to be a breach of the requirement to act with due skill, care and diligence (Individual Conduct Rule 2) but not a breach of the requirement to act with integrity (Individual Conduct Rule 1). As CEO, Mr Staley should have identified that:

  • He had a conflict of interest in relation to the letter, and needed to take particular care to maintain an appropriate distance from Group Compliance’s investigation.
  • There was a risk he would not be able to exercise impartial judgement in relation to how Barclays should respond.
  • Once the complaint was in the hands of the Group Compliance team, it was important that Group Compliance retained control over its investigation process.

This is the first case brought by the FCA and PRA under the Senior Managers Regime. The investigation found that Mr Staley made serious errors of judgement. While he made no personal gain in this instance, both regulators viewed his misconduct as sufficiently serious for each to impose a penalty of 10% of Mr Staley’s relevant annual income. Taking into account that he has settled at an early stage, Mr Staley has been fined a combined sum of £642,430. The FCA and PRA consider this to be appropriate and proportionate given the seniority of Mr Staley and the potential impact of the breach. In addition Mr Staley is censured by the publication of the regulators’ Final Notices.


In light of Mr Staley’s actions above, the FCA and PRA have some concerns about the Firm’s whistleblowing systems and controls, and have concluded that these require enhanced monitoring and scrutiny. Barclays is, therefore, now subject to requirements by which it must report annually to the FCA and PRA, including any whistleblowing cases involving allegations made against its Senior Managers and any cases where Barclays has sought to identify any anonymous whistleblowers. Barclays’ Whistleblowers’ Champions, who are approved by the FCA and PRA under the Senior Managers Regime, will have to attest personally to the soundness of its whistleblowing systems and controls on an annual basis. These measures, which apply to all cases until the end of 2020, are the first of their kind applied to a regulated firm in relation to whistleblowing. Barclays agreed to the requirements. They are published today by the FCA and PRA.

Notes to editors

  1. Mr Staley has been fined according to the FCA and PRA penalty regimes which each have five steps to calculate the level of the fines imposed. The detailed calculations are set out in both the PRA and FCA Final Notices. Mr Staley agreed to settle at an early stage of the regulators’ investigation and therefore qualified for a 30% reduction in the overall fine. Without this discount, the combined fine imposed by the FCA and PRA would have been £917,800. 

  2. The relevant events occurred during the period when Barclays’ whistleblowing policy applied only to employees. It was not until 7 September 2016 that the FCA and the PRA introduced new rules requiring firms to provide whistleblowing protections for ‘reportable concerns’ raised by ‘any person’ (i.e. not just workers). These rules require that firms have ‘appropriate and effective whistleblowing arrangements in place’; this includes requiring that all employees have appropriate training in relation to whistleblowing processes.

  3. Final Notice: Mr James Edward Staley

  4. Voluntary Application for Imposition of Requirements: Barclays Bank UK plc

  5. Voluntary Application for Imposition of Requirements: Barclays Bank plc

  6. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).

  7. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  8. Find out more information about the FCA.

May 17, 2018 in AML | Permalink | Comments (0)

Wednesday, May 16, 2018

Money laundering and terrorist financing: EU Adopts new rules

On 14 May 2018, the Council adopted a directive strengthening EU rules to prevent money laundering and terrorist financing.

The directive sets out to close down criminal finance without hindering the normal functioning of payment systems. Amending directive 2015/849, it is part of an action plan launched after a spate of terrorist attacks in Europe in 2016.

"These new rules respond to the need for increased security in Europe by further removing the means available to terrorists", said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency. "They will enable us to disrupt criminal networks without compromising fundamental rights and economic freedoms."

The directive was adopted at a meeting of the General Affairs Council, without discussion. This follows an agreement with the European Parliament reached in December 2017. The Parliament approved the agreed text on 19 April 2018.

The main changes to directive 2015/849 involve:

  • broadening access to information on beneficial ownership, improving transparency in the ownership of companies and trusts;
  •  addressing risks linked to prepaid cards and virtual currencies;
  • cooperation between financial intelligence units;
  • improved checks on transactions involving high-risk third countries.

May 16, 2018 in AML | Permalink | Comments (0)

2017 IRS Research Bulletin

2017 IRS Research Bulletin

The 2017 IRS Research Bulletin (Publication 1500) features selected papers from the IRS-Tax Policy Center (TPC) Research Conference held at the Urban Institute in Washington, DC, on June 21, 2017. Conference presenters and attendees included researchers from many areas of the IRS, officials from other government agencies, and academic and private sector experts on tax policy, tax administration, and tax compliance.

2017 IRS Research Bulletin


  1. Identifying Corporation Tax Avoidance
  2. Realizing the Potential of Tax Enforcement
  3. The Role of Incentives in Individual Compliance
  4. Creative Use of Nontax Data Sources

Here are PDF copies of the slides from the conference.

Session 1    Session 2      Session 3      Session 4

May 16, 2018 in Tax Compliance | Permalink | Comments (0)

Tuesday, May 15, 2018

South Texas Doctor Charged with $240 Million Health Care Fraud and International Money Laundering Scheme

A physician based in the McAllen, Texas area was charged in an indictment unsealed today for his role in a $240 million health care fraud and international money laundering scheme.  Download Zamora-Quezada Indictment

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan J. Patrick of the Southern District of Texas, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office made the announcement. 

Jorge Zamora-Quezada, 61, of Mission, Texas, was charged in a seven-count indictment filed in the Southern District of Texas.  He was charged with one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of conspiracy to commit money laundering.  Zamora-Quezada had his initial court appearance earlier today. His detention hearing is tomorrow, May 15, at 2 p.m. CDT before U.S. Magistrate Judge Peter E. Ormsby in the McAllen Division of the Southern District of Texas.

“Jorge Zamora-Quezada allegedly orchestrated a massive fraud scheme that jeopardized the health and wellbeing of innocent children, elderly, and disabled victims,” said Acting Assistant Attorney General Cronan.  “The allegations that Zamora-Quezada violated his oath to do no harm by administering unnecessary chemotherapy and other toxic medications to patients with serious diseases — including some of the most vulnerable victims imaginable — are almost beyond comprehension.  The Criminal Division is committed to combatting health care fraud and protecting victims of reprehensible schemes like the one alleged in this case.”

“We take allegations of this nature very seriously,” said U.S. Attorney Patrick.  “The prosecution of health care fraud is a high priority for the Southern District of Texas, especially when we suspect vulnerable patients have been allegedly exploited, misdiagnosed or possibly given potentially harmful medications as a means of committing that fraud.”

“Today’s indictment is the first step in holding Dr. Zamora-Quezada accountable for his allegedly egregious criminal conduct,” said HHS-OIG Special Agent in Charge Porter.  “His patients trusted him and presumed his integrity; in return he allegedly engaged in a scheme of false diagnoses and bogus courses of treatment, and doled out prescriptions for unnecessary and harmful medications, all for his personal financial gain and with no regard for patient well-being.  HHS-OIG will always pursue criminals masquerading as legitimate physicians, weed them out, and seek the harshest possible punishment, particularly when patient harm is a factor.” 

“The FBI is dedicated to working with our task force partners to address health care fraud, which is a growing and serious crime that impacts every city and small town in the nation,” said FBI Special Agent in Charge Combs.  “This investigation highlights an even greater concern presented by health care fraud than the significant financial losses—the physical and emotional harm suffered by the patients and their families.  It is why we at the FBI, together with our task force partners, are dedicated to seeking justice for the victims of Dr. Zamora-Quezada’s alleged crimes.”

 As set forth in the indictment, from 2000 through the filing of the indictment, Zamora-Quezada and his co-conspirators falsely diagnosed vulnerable patients -- including the young, elderly and disabled, from the Rio Grande Valley, San Antonio, and elsewhere -- with various degenerative diseases, including rheumatoid arthritis.  He and his co-conspirators then administered chemotherapy and other toxic medications to the patients based on that false diagnosis.  In addition to falsely diagnosing patients, Zamora-Quezada and his co-conspirators allegedly conducted a battery of fraudulent, repetitive, and excessive medical procedures on patients in order to increase revenue and fund Zamora-Quezada’s lavish and opulent lifestyle.

The indictment alleges that Zamora-Quezada and his co-conspirators flew in Zamora-Quezada’s million-dollar private jet or drove in his Maserati, which were both emblazoned with his initials, “ZQ,” between his offices in the Rio Grande Valley and San Antonio in order to perpetuate the fraud.  He and his co-conspirators transferred the proceeds derived from the conspiracy to purchase private jets, luxury vehicles, clothing from high-end retailers such as Louis Vuitton, and exclusive real estate located throughout the United States and Mexico.  He and his co-conspirators allegedly obstructed investigations by causing the creation of false and fictitious patient records, and concealed thousands of medical records from Medicare by stashing them in an unsecured and dilapidated barn located in the Rio Grande Valley.

The indictment also alleges that Zamora-Quezada and his co-conspirators laundered the proceeds of their fraud scheme by dissipating, transforming and concealing the source and location of the fraud proceeds by investing such proceeds in commercial and residential real estate in the United States and Mexico.  Among other properties, he and his co-conspirators acquired two penthouses in Puerto Vallarta, Mexico; a condominium in Aspen, Colorado; a condominium in Punta Mita, Mexico; and multiple homes and commercial properties located throughout Texas.  He then created the false appearance of legitimate wealth and income by renting the various commercial and residential properties that he acquired to individuals and entities.  Zamora-Quezada and his co-conspirators allegedly laundered the proceeds through a casa de cambio, or money exchange house, to various accounts maintained by financial institutions in Mexico. 

The indictment seeks the forfeiture of Zamora-Quezada’s personal jet, Maserati and multiple residential and commercial properties in the United States and Mexico.

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

The case is being investigated by the HHS-OIG’s McAllen Field Office, the FBI’s San Antonio Division-McAllen Resident Agency’s Rio Grande Valley Health Care Fraud Task Force and the McAllen Complex Financial Crimes Task Force. These task forces are comprised of investigators from Texas Department of Insurance, McAllen Police Department, Pharr Police Department and the Texas Health and Human Service Commission.  Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.

The FBI is seeking to identify potential victims of Zamora-Quezada and his co-conspirators.  If you were a patient of Zamora-Quezada from January 2000 through May 2018 and believe you may have been affected by his or his co-conspirators alleged crimes, please contact the FBI via the FBI victim’s hotline, 1-833-432-4873, Option 8, or if you have access to email you may email the taskforce at The FBI is legally mandated to identify victims of federal crimes that it investigates and provide these victims with information, assistance services, and resources.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 

May 15, 2018 in AML | Permalink | Comments (0)

Sunday, May 13, 2018

BVI Finance Remains Optimistic about the Future of its Industry Read more at: To learn more about the British Virgin Islands'

Following the decision by the UK’s House of Commons to force the Overseas Territories to adopt public registers of beneficial ownership of companies, the Premier of the British Virgin Islands responded swiftly to reassure the financial sector and those who use its services around the world. The Sanctions and Anti-Money Laundering Bill now requires the UK’s Secretary of State to prepare a draft Order in Council by 31 December 2020 in the event the Overseas Territories, including the BVI, have not adopted public registers.  

The Premier Dr D Orlando Smith OBE stated: “As a constitutional democracy, the BVI believes in the rule of the law. According to the rule of law and our constitution, the fundamental rights of privacy of all citizens and corporate entities will be protected and upheld”.   BVI Finance welcomes this statement.   The Territory has been at the forefront of global transparency initiatives by creating an innovative digital platform, the Beneficial Ownership Secure Search System.   The information accessed through the system is verified for accuracy by regulated corporate service providers and available to the British authorities within as little as an hour of a valid request being made.  

Like the British Virgin Islands Government, BVI Finance is strongly of the view that a verified private register is a far more robust and effective approach to ensure transparency than an unverified public register.  Despite events in the UK, there will be no changes in the foreseeable future and over the next two years, BVI Finance will continue to engage with relevant stakeholders and work closely with the British Virgin Islands Government as it examines all possible remedies to ensure that the BVI continues to play a leading role in the global financial services industry.

Lorna Smith, OBE, Interim Executive Director of BVI Finance said: “The world will continue to need high quality international financial services and the British Virgin Islands will continue to play a leading role in meeting the needs of our clients. We look forward to taking our message to the world starting with the STEP Caribbean Conference this weekend and into Asia with our major roadshow in June”.  

Read more at:

May 13, 2018 in AML | Permalink | Comments (0)

OECD invites public comments on the scope of the future revision of Chapter IV (administrative approaches) and Chapter VII (intra-group services) of the Transfer Pricing Guidelines

The OECD is considering starting two new projects to revise the guidance in Chapter IV (administrative approaches) and Chapter VII (intra-group services) of the Transfer Pricing Guidelines.

Public comments are invited on:

Interested parties are invited to send their comments no later than 20 June 2018 to in Word format . Comments in excess of ten pages should attach an executive summary limited to two pages.

All comments received will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.

For more information, please contact Jeff VanderWolk, Head of the Tax Treaties and Transfer Pricing Division, Tomas Balco, Head of the Transfer Pricing Unit or the Communications Office at the OECD Centre for Tax Policy and Administration.

May 13, 2018 in BEPS | Permalink | Comments (0)