Technology has changed the world. It’s crazy to me that these days, I could sit on an airplane and send an email to my brother under the ocean (he’s a submariner). Or that I can, with the click of a mouse, have almost anything delivered to my house from trees to laundry detergent to a car. Or that I can, as I did last week, have virtual face-to-face meetings with clients in South Africa and Spain inside of an hour. These advancements have made our lives easier, but that’s not always the case. Sometimes, technology can be used in ways that exploit, rob, and paralyze good people. And those threats are exactly what the Joint Chiefs of Global Tax Enforcement (J5) are working together to end.
The J5 organized last year to combat crime on a global level by sharing resources. The J5 consists of criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States who are committed to collaboration in the fight against international and transnational tax crime and money laundering. Membership of the J5 includes the heads of tax crime and senior officials in tax agencies, including Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen-en Opsporingsdienst (FIOD), HM Revenue & Customs (HMRC) and Internal Revenue Service Criminal Investigation (IRS-CI). You can read more about the J5 here.
The J5 marked its one-year anniversary this year in Washington, DC. The meeting coincided with a global cyber training event hosted by the United States at the World Bank. The timing emphasizes the group’s focus on shared areas of concern and cross-national tax crime threats, including cybercrime and cryptocurrency.
As part of their efforts, the J5 are involved in more than 50 investigations involving sophisticated international enablers of tax evasion, including a global financial institution and its intermediaries who facilitate taxpayers to hide their income and assets around the world. The agencies are also working together on other criminal cases such as those involving money laundering and the smuggling of illicit commodities.
How effective are they? The group claims there have been more data exchanges between J5 partner agencies in the past year than the previous ten years combined. While working within existing treaties and laws, that shared information means that the members can open new cases more quickly, develop existing cases more rapidly, and find efficiencies to reduce the time it takes to work cases.
Hans van der Vlist, General Director FIOD, praised the group’s cooperation, saying that it is “becoming more effective and operational.” He noted that just two weeks ago, they were able to remove an important online mixer for cryptocurrencies and are now analyzing the mixer’s information. Online mixers are companies that pool cryptocurrency funds together and create a series of new transactions – allegedly to hide the source of the funds. In that way, it’s like an ultra-sophisticated version of money laundering.
Given its track record, it’s no surprise that the Internal Revenue Service – Criminal Investigation (IRS-CI) is an active partner in these joint efforts to combat global crime. “I’m extremely proud of the work we have accomplished in just one year since the formation of the J5,” said Don Fort, Chief of IRS-CI. “Each country came to the group with expectations and challenges that needed to be overcome so we could each realize our goal. We have found innovative ways to tackle these problems, remove barriers, and develop processes that make the sum of all of our parts a much more efficient and successful organization. It is not a good time to be a tax criminal on the run—your days are numbered.”
The J5 are also focused on information sharing. One of the platforms that the J5 uses is Financial Criminal Investigation (FCInet), a decentralized virtual computer network that enables agencies to compare, analyze, and exchange data anonymously. The platform provides real-time information and allows agencies from different jurisdictions to work together while respecting each other’s local autonomy. With FCInet, Financial Criminal Investigation Services (FCISs) like IRS-CI can connect information without the need to surrender data or control to a central database and without jeopardizing rights to privacy. You can find out more here.
As part of the anniversary event, members underwent cyber training hosted by IRS-CI, a leader in cyber-crimes and the investigative work worldwide, in conjunction with the World Bank. Attendees received training on virtual currency, blockchain, and the dark web. Members also learned more about cryptocurrency tracing and open source intelligence.
The J5 continues to collaborate internationally to reduce threats to tax administrations that might be posed by cryptocurrencies and cybercrime and to make the most of data and technology. For more information about the J5, you can check out the IRS-CI’s J5 webpage here.
