On the heels of a landmark settlement that allows U.S. tax collectors a rare peek inside the vaults of Switzerland, lawyers with Canada Revenue Agency are preparing to meet with the embattled Swiss bank UBS in a few weeks to discuss the Canadian fortunes hidden offshore, the Minister of National Revenue says.
This week, the U.S. Department of Justice announced that a lawsuit it brought against the bank, one of the largest managers of private wealth in the world, had pressured UBS into handing over details on 4,450 accounts holding an estimated $18-billion (U.S.) - a major blow to a bank, and a country, that has long prided itself on its discretion and secrecy.
American clients of UBS have been turning in droves to tax lawyers who specialize in voluntary disclosures, the clemency program that allows taxpayers to declare their offshore holdings, plus interest, to avoid prosecution.
Investigators released documents that showed part of UBS unit - known internally at the bank as The Canada Desk - had helped wealthy Canadians funnel as much as $5.6-billion to Switzerland as of 2005.
When asked why the Canada Revenue Agency hadn't taken the same steps as the United States to obtain the details behind those accounts, Mr. Blackburn insisted his agency didn't have access to the same information. He pointed to the role of Bradley Birkenfeld, the former UBS banker turned informant who has supplied the U.S. Justice Department, the IRS and the Securities and Exchange Commission with piles of internal UBS documents.
Mr. Blackburn said he has supplied a list of proposed legislative changes to the Department of Finance. (It is CRA's role to enforce the laws enacted by Finance.) The changes, which he says will clamp down on tax-haven abuse, include a provision that will allow the agency to view all records obtained by the Financial Transactions and Reports Analysis Centre, or FINTRAC. Currently, FINTRAC is only allowed to pass on transactions where they suspect money laundering, terrorist financing or tax fraud.
Source: The Globe and Mail
Friday, Aug. 21, 2009