You clearly know what you’re talking about, so why are you making so many excuses which only show how hard the finncial services industry in Jersey works to avoid its obligations?

Of course the UK would like all the information that should have been disclosed by you. That’s why it set up the manesty scheme. It can handle the work.

And to say that to report would block up the system is not a reaosnable excuse for not reporting what you know is due, and which it is your duty to report on pain of criminal prosecution.

And surely you know that reporting does not stop a transaction proceeding? Consent can be given, and no doubt could be negotiated in bulk in this case, without difficulty of tipping off arising.

So your comments are simply excuses for criminal conduct. But there is an issue on which we agree - it would be good to have HMRC and FIS/FIU input. Why don’t we arrange a meeting with them, you and me and them? I will not disclose your identity publicly.

Richard

As a matter of course I think you will find shortly that alot of the CI banks with remove the withholding tax option, moving to full disclosure.

This is because we understand there is a “grey” area which can potentially cause problems. Its not as clear cut as you are trying to describe on this blog.

There are countless issues that may arise which you have not considered and your insistence that we should automatically disclose on all UK clients is absurd. For a start SOCA / HMRC would be unable to deal with the onward disclosures from the relevant FIS/FIU’s they would just enter the abyss. They would not be happy with receiving huge amounts of information on clients which they would then have to investigate only to find those clients are completing their tax returns accurately. How do you expect that they would cope with the extra workload of which a large proportion would be wasted time and energy?

If you had it your way and ALL UK clients were disclosed on, how would you then expect us to then manage the clients accounts once they have been disclosed. We have to continue to manage the relationship as if we don’t that could put us into a tipping off position.

Once a disclosure has been made then that account will be monitored constantly. Every transaction / discussion with the client would need to be disclosed to the relevant FIS/FIU the amount of work would be monstrous.

So for you to say that disclosure is the only way to go really is absurd. If we ask the client for a copy of tax advice and they refuse then we would immediately disclose. If they provide us with all information requested then why on earth would we want to disclose??

It would be great if we could get some input here from a representative of one of the FIS/FIU’s or the HMRC to give their thoughts and guidance

I disagree with your interpretation if tipping off. So might the Jersey Financial Services Commission. It says at http://www.jerseyfsc.org/pdf/aml_and_dp_guide.pdf :

In order to prevent individuals and financial services businesses from warning the subjects of SARs that they have made a SAR, money laundering legislation also criminalises ”tipping off”. Inter alia, where a person knows or suspects that a SAR has been made to a police officer, it is an offence to disclose to any other person information which is likely to prejudice any investigation which might be conducted following the making of the SAR. Under the Terrorism (Jersey) Law 2002, an objective test is used to determine whether the offence is committed; a person need only have reasonable cause to suspect that the SAR either had been made or will be made to commit the offence of tipping off. The most obvious example of a disclosure likely to prejudice an investigation is letting an individual know that the authorities are interested in him so that he has time to destroy evidence.

The abnormal appraoch you describe to ask a client to justify their action is enough, in my opinion, to constitute tipping off due to the fact that you acknowledge that a request for information on a customer’s tax affairs is rare.

The UK 2002 Proceeds of Crime Act makes clear that ‘tipping-off’: it is a criminal offence for anyone to do or say anything that might ‘tip-off’ someone else that they are under suspicion of acquiring, retaining, using or controlling proceeds of crime. That applies whether or not any report has been made to NCIS.

I think you contravene this principle which is also in Channel Islands law.

As such I think your approach contravenes the law and may be illegal.

Worse, it is an action taken not in good faith but blatantly in bad faith, to protect the customer. Reporting all customers of a Channel Islands bank who have not asked for information exchange on interest paid would be obviously an action taken in good faith, and is REQUIRED by law in my opinion. Your comments are simply cover for what I consider your criminal conduct.

That you do not undertsand this is apparent from your last comment. It is not your duty to prove tax evasion. It is your duty to report suspsicion of tax evasion. It is obvious you are not doing so. That is criminal conduct on your part. Your failure to appraise yourself of this requirement is also, quite literally, criminal.

What further evidence need I present of the failure of the fiancial services industry in the Channel Islands to fulfil its legal obligations than this?

And I make this point: it is the corruption you endorse through your criminal conduct which will eventually destroy your industry and harm many innocent people in the Channel Islands. But that will be necessary to stop the wilful connivance of the industry by turning a blind eye, as you clearly do, to the criminal activities, including tax evasion that are taking place within your companies, and which you do not report, meaning you commit criminal activity daily.

I rest my case. You said this was your final comment. I do likewise. My case is proven.

Richard

SO in essence you are asking us to disclose where we do not have sufficient grounds to disclose and where we could potentially end up being the ones sued and ultimately sent to prison??

Why should we not be allowed the time to ask our clients the questions?? Are we meant to be business prevention businesses? The majority of finance in the CI is private banking. Private banking means that you are given a more personal service and have a relationship manager who is there to assist you and understand your financial affairs. Would it not make more sense for us to allay our fears or at least attempt to allay them?

Has something changed - are people guilty until proven innocent?

So can you explain to me (apart from the cases where you might STR / disclose etc) how we would be tipping off if we asked a client questions relating to their tax affairs or conduct of their account?

You obviously don’t understand the concept of tipping off.

We as bankers have a relationship with our clients. If something they do or say puts us in an uneasy position or takes us out of our comfort zone then we are obliged and should in all cases ask questions in order to allay any uneasiness.

If the client doesn’t provide us with sufficient information / documentation / evidence to satisfy us and put us back in our comfort zone then we go into the state of “suspicion” which is when we would be likely to submit an STR.

How on earth do you think that asking questions of the client is tipping off?? You can only be tipping off if you know or suspect that there might be an investigation ongoing into that client. If you have not submitted an STR / disclosure or received a production order then how on earth could you prove that you would be tipping off??

By asking the client for copies of tax advice we are covering ourselves and ensuring that we understand the clients financial affairs a little better. If that client fails to provide information requested then that would put us into a suspicious mind and then an STR / disclosure would ensue.

If we did not ask the clients for information and did not have sufficient evidence in order to disclose then we would not be doing so in good faith.

Do you not understand the concept of tipping off?? I’m quite happy to give you a more detailed overview if you like

Your comment is staggering

You say that before submitting an STR there “would have been time to communicate with the account holder and ask for copies of tax advice to satisfy ourselves that they are not evading tax.”

Don’t you undertsand the concept of “tipping off”? This is giving those people notice that they are under investigation. That is itself an offence under proper money laundering rules punishable as a crime.

If that is what you do you are by definition complicit in the process of money laundering in my opinion since, as you note, this is not standard practice and will therefore act as a signal to the account holder that an investigation is under way.

The rest of your posting reveals a simialr lack of understanding. You need have no knowledge at all of the taxpayers affairs, whether in the UK or any other EU state. All you need do is have suspiscion that they may be money laundering. That is why these reports are called suspiscious transaction reports. And an account holder’s request that information not be disclosed about interest paid to their home tax authority is, in my opinion, a reasonable basis for believing that money laundering is happening because the probability of evasion in that case is high. That is not just sufficient basis to report, it is a basis for requiring a report. You need know no more. Failure to report is, of course, a criminal offence.

This would take no time at all to investigate. I’m sure a bulk submission would also be allowed, say on an Excel spreadsheet. All it would take would be for the bank to list all EU residents who have not agreed to disclose details of their interest earned to their home countries providing name. address and the amount paid and the obligation to report suspected money laundering in the form of tax evasion would be fulfilled.

How can you deny that this is the bank’s duty?

Richard