Direct taxation and bank disclosure in the context of the law of the European Union
| Published date | 01 January 1998 |
| Date | 01 January 1998 |
| Pages | 11-20 |
| DOI | https://doi.org/10.1108/eb024951 |
| Author | Nicholas Dorn,Simone White |
Journal of Financial Regulation and Compliance Volume 6 Number 1
Direct taxation and bank disclosure in the
context of the law of the European Union
Dr Nicholas Dorn and Dr Simone White
Received: 31st August, 1997
ECRU,
51 Crouch
Hill,
London N4 4AJ; tel/fax: 0171 2639720.
Nicholas Dorn PhD recently carried out
research for HMC&E and coordinates a
study funded by the European Commission
(SG-C-5) on administrative and civil mea-
sures in drug control in the EU. He co-
edited 'European Drug Policies and
Enfor-
cement' published by Macmillan and is
director of research and development at
ISDD, London but writes here in a private
capacity.
E-mail:
ecru@dial.pipex.com or
fax 00 44
171 263
9720.
Simone White LLM PhD has carried out
work for the European Commission
(DG.20) and is the author of 'Protection of
the financial interests of the European
Communities: the fight against fraud and
corruption' (Kluwer
1998)
and other works
on EC fraud. She is an Associate Research
Fellow of IALS (the Institute for Advanced
Legal Studies), University of London and
can be contacted there or through ECRU
(Economic Crime Research Unit), coordi-
nates above.
ABSTRACT
Without
prejudice
to the idea that criminal law
should be brought to bear upon tax evasion, in
this paper the
authors
focus on the potential of
European Community (EC) law in
the
frame-
work of
economic
regulation, trade and the fight
for employment. Their argument is
directed
at
evasion of all forms of
direct
tax,
including
cor-
poration tax, tax on the income of
individuals
and all other forms of
direct
taxation.
INTRODUCTION
How can bank secrecy, that can provide a
cover for evasion of taxes by commercial
bodies or individuals, be combated?1 The
criminal law approach, at both national
and other levels, has attractions. For many
experts, the way forward is to suggest that
there may be linkages between (i) money
that is 'warm' because tax has not been
paid on it, and (ii) money that is 'hot'
because it may be related to corporate
crimes, and (iii) money that is 'very hot',
politically speaking, because it originates
from drug trafficking. Of course, none of
the banks want to be considered as provid-
ing safe havens for this money, nevertheless
they are left with the possibility that
untaxed funds may provide a sanctuary for
the funds of organised crime and drug
traf-
ficking.
One problem with that line of argument
is that it may provoke an outraged and
angry response on behalf of banks and
their customers. Banks and their customers
may then demand that those making the
argument either desist, or provide evidence
for their accusations (which can be diffi-
cult).
Legal action by the banks could be
threatened or occur. This results in a stalled
debate, which is seen now in many of the
member states of the European Union.
The approach taken by the present
authors is different: for inspiration, they
look to the law of the European Union, in
Journal of Financial Regulation
and Compliance, Vol. 6, No. 1,
1998,
pp.
11-20
© Henry Stewart Publications,
1358-1988
Page 11
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