The US, Australia, Canada, Netherlands, UK form allegiance to trade and share intel on crypto-tax crime and collaborate on investigations.
In an announcement on its website, the US Internal Revenue Service (IRS) said that they are joining forces with the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen-en Opsporingsdienst (FIOD, Netherlands), HM Revenue & Customs (HMRC, UK), and Internal Revenue Service Criminal Investigation (IRS-CI) to fight transnational tax crime and money laundering, which have become immediate areas of interest as blockchain technology and cryptocurrencies make cross-border fund transfers easier.
The alliance, called Joint Chiefs of Global Tax Enforcement, or J5, would supposedly increase collaboration in enforcement by developing shared strategies for data and intelligence gathering, procedures for joint investigation, and streamline communications so they can “tackle transnational tax crime, cybercrime and money laundering.”
“We are convinced that offshore structures and financial instruments, where used to commit tax crime and money laundering, are detrimental to the economic, fiscal, and social interests of our countries,” the IRS wrote. “We will work together to investigate those who enable transnational tax crime and money laundering and those who benefit from it. We will also collaborate internationally to reduce the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.”
The release says that J5 was formed as a response to the Organisation for Economic Cooperation and Development’s (OECD) call for solutions to tax crime.
Dutch Finance Minister Wopke Hoekstra said in an open letter in March this year that regulation must be created with an international approach, otherwise enforcement is impossible. International Monetary Fund (IMF) chief Christine Lagarde shares the same view, writing in a blog post shortly after that international cooperation is an absolute necessity in the new age of fintech: “no country can handle this challenge alone,” Lagarde wrote.
In fact, in her post, Lagarde suggests that regulators need to look no further than blockchain technology itself to fight these crimes.
“Indeed, the same innovations that power crypto-assets can also help us regulate them. To put it another way, we can fight fire with fire,” she wrote.“Regulatory technology and supervisory technology can help shut criminals out of the crypto world. More broadly, we are seeing crypto-asset exchanges in some countries that are subject to know-your-customer requirements.”
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