Wednesday, July 27, 2016

Canadian banks ordered to disclose Cayman dealings

A Federal Court judge has ordered two Canadian banks to disclose their dealings with a financial institution in the tax haven of Cayman Islands.

It’s the second time the government has sought a court order to investigate offshore tax evasion since the Star, in collaboration with the International Consortium of Investigative Journalists, made the Panama Papers leak public in April. After years of weak enforcement, experts say the recent activity is evidence of a new-found will to crack down on the wealthy who hide their money offshore.

Royal Bank of Canada and Citibank, N.A. now have 120 days to hand over all transaction information for accounts held by Cayman National Bank Ltd. between 2009 and 2015.

The banks will have to provide the Canada Revenue Agency with account statements, deposit slips, cheques, bank drafts and wire transfer orders, all of which will help CRA auditors determine whether Canadian residents used these banks to transfer money home without reporting it.

Neither bank opposed the federal government’s court application.

In May, the CRA also sought a court order for RBC’s dealings with the law firm at the centre of the Panama Papers leak, Mossack Fonseca. RBC didn’t oppose that request either.

“It’s part of a resurgence in the investigation and prosecution of offshore tax evasion,” said tax lawyer Joseph Markson. “In the present climate, following the Panama Papers and international efforts to end tax haven secrecy, resistance becomes futile.”  (more...)

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