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US, Britain, Australia unveil tax-haven probe

British finance minister George Osborne at the Treasury in central London on February 6, 2013
British finance minister George Osborne at the Treasury in central London on February 6, 2013. Britain said on Friday it had caught more than 100 people who have been hiding money in offshore tax havens following a wide-ranging investigation carried out w

The United States, Britain and Australia announced a joint effort Friday to expose tax dodgers with an investigation of a massive cache of bank account data from tax havens that was leaked to the authorities.

The three countries said they are sharing the huge trove of data on accounts in Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands, which includes names of account holders and their advisers.

Britain said it had identified more than 100 people who have been hiding money in offshore tax havens in scouring the data.

"This data is another weapon in (the British tax authorities') arsenal," said the British finance minister, George Osborne, as he prepared to open the meeting of the Group of Seven finance chiefs outside London.

"The message is simple: if you evade tax, we're coming after you."

The Australian Tax Office said it had also discovered 100 Australian names, and two cases had already been referred for criminal investigation.

The information came from a 400-gigabyte cache of data -- more than two million documents -- leaked to the authorities which shows the activities of trusts and companies in the four countries, each of which hosts a substantial tax-free offshore banking industry offering secrecy to account holders.

The US, Britain and Australia did not say how they obtained the data, or which banks were involved.

But they offered to share the data with other countries interested in cracking down on tax avoidance by their own nationals.

"This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion," said Steven Miller, the acting commissioner of the US Internal Revenue Service.

"Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes."

Miller said they were going after both tax evaders and the advisers he said enable the evasion by helping to set up trusts under nominee names and other secretive accounts offshore.

"Advisers may be subject to civil penalties or criminal prosecution for promoting such arrangements as a means to avoid or evade tax liability or circumvent information reporting requirements," he said.

Germany's finance ministry said it had been offered the data and would take advantage.

"What is particularly important is that with this exchange of data and this international cooperation, it will be possible to discover and fight the very complex tactics and operating modes" of tax evasion, it said in a statement.

With major advanced economies all under pressure to slash budget deficits and boost income, efforts have grown to collect taxes from citizens' offshore accounts.

Scandals of officials and wealthy executives stashing cash and businesses stockpiling profits in tax-free and secret accounts offshore have erupted in the United States, France, Greece, Germany, Britain and elsewhere.

In April the Group of 20 leading economies endorsed for the first time a program to move toward the automatic exchange of banking information, in an effort to end tax evasion supported by bank secrecy.

A senior US Treasury official said earlier this week that the issue would be on the agenda of the two-day G-7 finance chiefs meeting that began near London Friday.

While the source of the data held by the three countries was not revealed, the International Consortium of Investigative Journalists said it believed the records included those obtained by its journalists and publicized last month -- a 260-megabyte horde of extensive account details, some from Singapore-based wealth manager Portcullis TrustNet.

Those records "illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike," the ICIJ said.

Gerard Ryle, director of ICIJ, said he was not sure why the three countries made their announcement Friday, a month after the group released its data.

"There's a lot of pressure across Europe to do something about tax havens," he told AFP.

"The leaders have to be seen as doing something because the public is really angry about what they've been reading."