26 Oct FinCEN files reveal important information sharing challenges in countering tax crimes in the EU

The recent FinCEN files leak demonstrated the scale of the problem of information-sharing across borders when it comes to countering tax crimes and financial misconduct around the world. The blatant information-sharing deficit within the global financial system serves as a strong policy wake-up call and requires the urgent attention of policymakers.

As part of the research conducted in the PROTAX project explored that information sharing plays a key role in effective investigation and prosecution of tax crimes.

The increasingly transnational nature of tax crimes means that the information chain cannot stop at the borders and has to include foreign law enforcement agencies (LEAs) and judicial authorities. The success of the financial crime countering ecosystem, thus, depends on effective cross-border collaboration, but the current level of information-sharing does not provide appropriate access to information on financial criminals on time.

What are the main challenges and bottlenecks hindering communication across borders when tackling tax fraud?

The PROTAX team, led by Coventry University, has examined in previous research obstacles and best practices on information sharing in the context of combating tax crimes through an overview of the relevant players and an analysis of the legal framework of information sharing and cooperation. The results of the research work will be incorporated into the PROTAX toolkits and risk assessment for policymakers and LEAs for combating tax crime.

In this policy paper, we identify a number of policy concerns and propose solutions to them based on our cutting-edge research. Firstly, the paper revisits findings on the analysis of the information sharing framework currently in place to combat tax crime and identifies remaining key challenges and bottlenecks in the current institutional and organisational architecture. It also offers a critique of the role of human factors, a key focus in the PROTAX project, regarding information sharing among relevant key stakeholders in tax eco-systems.

For more insights and proposals to find durable solutions, read our policy paper by Dr Reinhard Kreissl and Prof Dr Umut Turksen: “FinCEN files reveal important information sharing challenges and human factors in countering tax crimes in the EU”

Contact us for more information on this research area and the upcoming policy toolkit.