SA sniffs out criminals in world’s tax havens

South African government agencies are negotiating with many of the world’s tax havens in a bid to crack down on white-collar criminals, crime syndicates and tax dodgers. More than 30 tax havens — from Britain’s Channel Islands to the Cayman Islands in the Caribbean — are in talks with the SA Revenue Service (Sars), the National Prosecuting Authority (NPA) and the Reserve Bank. White-collar crime costs South Africa about R150-billion a year, according to the White Collar Crime Task Group, while the national treasury says up to R80-billion is laundered through the country each year.

The negotiations follow a decision by the G20 in London earlier this year. The G20 warned that if tax havens refuse to adopt new rules on financial transparency they will face international sanctions, including the withdrawal of funding by the World Bank.

New co-operation agreements mean former tax havens will assist SA in cases involving tax and exchange-control evasion.

Such cases are likely to include the Reserve Bank’s marathon legal tussle with billionaire Mzi Khumalo to attach his assets after he allegedly moved R1-billion to the Virgin Islands without the bank’s approval.

Tax havens on SA’s radar include the Isle of Man, Bermuda, Liberia, Guernsey, Gibraltar, Seychelles and Mauritius.

Sars spokesman Adrian Lackay said Sars was “owed billions by people who have the capacity to pay tax but choose not to”.

In March, SARS revealed that it was reviewing the files of more than 600 wealthy individuals, including their family trusts. But officials declined to name them.

Cases involving co-operation between the NPA’s Asset Forfeiture Unit (AFU), tax havens and G20 member countries include:

Freezing billionaire David King’s R1-billion-plus assets in the UK and Guernsey;

Seizure of about R100-million worth of assets, including a platinum refinery in the UK, from Bobby Boekhoud, who was involved in a syndicate that smuggled precious metals worth R200-million;

The AFU’s joint operation with Irish police to seize 1.5 tons of cocaine worth R848-million smuggled into the country by a South African, who then had R15 million of his assets seized, and

Freezing R43-million in bank accounts linked to Barry Tannenbaum, who allegedly defrauded investors of R10-billion.

AFU head Willie Hofmeyr said: “The rapid speed with which the (Tannenbaum) order was obtained was the result of the excellent co-operation from the various institutions working on the matter.” At least $11-trillion is parked in tax havens, according to the Organisation for Economic Co-operation and Development. Last week it was announced that more than 40 countries would open their books to foreign tax inspectors and police. One of them is Mauritius, to where South African corporates and individuals have legally moved and invested more than R35-billion by December 2007, according to the Reserve Bank. Other money legally placed offshore includes R154.7-billion in Luxembourg and R41.9-billion in Bermuda.

Hofmeyr said technology and globalisation made it easy for “criminals to operate seamlessly across borders”. This week the Swiss government announced that it would hand over details of about 4450 bank accounts to US authorities as part of a deal struck with UBS, the world’s second-largest wealth manager. Swiss banks hold an estimated $2-trillion of foreign money. Reuters reported that the US tax commissioner said the deal would give Washington access to accounts of Americans suspected of committing tax fraud.

– TAXtalk: www.taxtalk.co.za.