In June 2022, the OECD strengthened its role as a leading standard setter on combatting illicit financial flows through the publication of the Recommendation of the Council on the Ten Global Principles for Fighting Tax Crime. This landmark OECD Recommendation offers the first comprehensive global standard on combatting tax crimes, by setting out the ten essential legal, institutional, administrative, and operational frameworks necessary to effectively prevent, detect, investigate, and prosecute tax crimes, and to recover the proceeds of those crimes.
This new Recommendation complements and strengthens the previously published Ten Global Principles guidance document by converting it into an official OECD standard, included in the Compendium of OECD Legal Instruments. The Recommendation is supported by a practical guide on implementation, designed to support jurisdictions' application of the Ten Global Principles to their domestic tax crime frameworks, including strategies for tackling professionals who enable tax and white-collar crimes and fostering international co-operation in the recovery of assets. The guide is supported by a compendium of “country chapters” which benchmark the domestic tax crime frameworks of 33 jurisdictions, including 27 Members, against the Ten Global Principles. These country chapters are available online, in English and French.
Furthermore, the OECD's Tax Crime Maturity Model serves as an important practical tool for jurisdictions to self-assess, monitor, and track their progress on implementation of the Ten Global Principles over time.
Over the past few decades, the world has witnessed increasingly sophisticated financial crimes being carried out through complex and opaque arrangements, often across borders. These crimes are often facilitated by a small subset of professionals, including lawyers, accountants, financial advisers and others who help to engineer the legal and financial structures seen in complex tax evasion and financial crimes. These crimes have a hugely damaging impact on society, posing systemic risks for jurisdictions’ financial systems and tax revenue, helping criminals launder the proceeds of crime, and undermining public confidence and trust in government.
These impacts, like the underlying crimes themselves, do not respect national borders and, indeed, exploit any weaknesses in both domestic and international co-operation. This calls for a multi-disciplinary and multi-agency strategy to ensure effective joining up and co-operation.
A report by the OECD Task Force on Tax Crimes and Other Crimes (TFTC) looks at the approaches and strategies adopted by jurisdictions to disrupt the activities of these professional enablers. The report, Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes, encourages all jurisdictions to consider adopting a national strategy, or to strengthen their existing strategy for addressing professional enablers. The key elements of an effective strategy identified by the TFTC are:
Skills and awareness: Ensuring that tax crime investigators are equipped with the understanding, intelligence and analytics skills.
While often viewed as distinct crimes, tax crime and corruption are intrinsically linked, as criminals fail to report income derived from corrupt activities for tax purposes or over-report in an attempt to launder the proceeds of corruption. More broadly, where corruption is prevalent in society, this can foster tax evasion. Consequently, tax authorities must work in tandem with other law enforcement authorities (e.g police, prosecutors, anti-corruption authorities, financial crime authorities, anti-money laundering authorities etc.) to effectively prevent, detect, and enforce these crimes.
Promoting whole-of-government approaches to combatting tax and other financial crimes is at the heart of the TFTC’s mandate, and has been the subject of a range of reports and guides over the years. To learn more on the essential legal, institutional, and operational measures required for successful whole-of-government responses to financial crime, please see the following documents.