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Authorities in Belgium are investigating a case that may turn out to be the country’s largest ever fraud. De Tijd this week published some of the names from a list of 170 of Antwerp diamond traders who it claims are being investigated by authorities for spiriting almost $1 billion (€700 million) in unpaid taxes into secret Geneva bank accounts.
Approximately 80% of the total world production of rough diamonds is traded by the 185 gem companies operating in Antwerp (pictured) and 50% of the globe’s polished diamonds pass through the Flemish town. The Antwerp traders are among a much larger roster of at least 24,000 HSBC Private Bank clients from Canada, India and Germany under investigation by French authorities since 2009.
According to IDEX Online France apparently informed Indian, Belgian, German and Canadian tax authorities about their listed citizens. Leaks from the ensuing investigation claim that some 700 Indian citizens – some of them leading diamond traders – are among those who held accounts at the Geneva branch.
Below is a news snippet from EuroNews:
Diamond World Net carried a response from Antwerp World Diamond Centre:
Diamond industry astonished regarding new violation of the investigation secrecy rules
Antwerp World Diamond Center (AWDC) and the diamond sector note with astonishment the information that has appeared in the media and the apparent violation of the secrecy of the investigation which has occurred because the authorities have granted access to a stolen list containing names of private persons and bank accounts outside Belgium.
Since the beginning of this year the special tax brigade (BBI) systematically refuses diamond undertakings to have access to their individual file, this while also the auditor-general (public prosecutor) at the State Council (supreme administrative court in Belgium) agrees with the arguments of the diamond companies. It now appears that granting full access to the media is not a problem. Tomorrow this case is pleaded for the first time in front of the State Council.
As representative organization for the diamond sector, AWDC is not involved whatsoever in this file. As AWDC has indicated before, it is assisting the authorities that are conducting investigations and will continue to do so in the future.
AWDC has continuously been working towards a clean and transparent worldwide diamond trade. In case persons or undertakings would at the end of a trial be convicted for fraudulent diamond trade practices, AWDC will not hesitate to take all appropriate measures.
AWDC refuses to get involved in today’s open ended allegations based on a clear violation of basic rights of the persons and undertakings concerned.
The diamond industry is by definition an international sector that increasingly operates through international companies on all continents. The involvement of persons and companies active in the diamond industry with international bank accounts, is the logical consequence of the international nature of the sector. AWDC is informed by specialists that also for Belgian companies, having foreign bank accounts is legal and does not as such imply fraud.
AWDC has been working since many years towards a transparent and clean diamond trade. Together with the international Financial Action Task Force (FATF) AWDC has contributed to the development of the international money laundering rules as applicable to the diamond industry and its implementation in Antwerp.
Together with the European Commission AWDC worked on the development and implementation of the measures aiming at combatting the trade in conflict diamonds.
Since more than 15 years AWDC has been collaborating with the Belgian tax administration on a workable and efficient mechanism for conducting tax inspection of diamond undertakings.
Also in the future, AWDC will continue to work towards the further development of the international diamond trade in Antwerp, acting in close concertation with the international, federal, Flemish and local authorities.
Diamonds are the first export product from Belgium outside the EU. Antwerp still remains the world’s most important centre for the diamond trade. Approximately 80% of the total world production of rough diamonds is being traded in Antwerp, 50% of the polished diamonds worldwide, are passing through Antwerp. The diamond industry is responsible for 70% of the Belgian trade surplus and for a total of about 34000 direct and indirect jobs in the province of Antwerp.
Comments
Happy
It is a matter of tax evasion verses tax avoidance.
They are allowed to have over seas bank accounts as long as the accounts are not connected to tax evasion.
But it is never entirely clear what is construed as tax evasion verses the avoidance of paying tax.
In general Banks dont ask where the money comes from and they advise their clients how to lower their taxes by way of specific types of accounts and accounting practices that enable the clients to pay less taxes or often enough very little taxes on the profits.
However if a company is cooking the books and claiming they made no profits when they made millions or tens of millions of dollars profit and they maintain foriegn bank accounts for the purpose of evading the taxes that should be paid then the government has the right to penalise them and attempt to force the companies or directors to pay the due taxes.
The companies can not be forced to reveal their accounts and the amounts of money and the Swiss banks honour their secracy policies to protect the clients.
However in the case of really large sums of money governments have the means to force the Swiss banks to cooperate which in turns forces the account holders to cooperate.
But the governments can not sieze the accounts of the account holders.
In the home countries the governments have the means to sieze company assets and stop the business from operating further until the accounting matters have been legal addressed and the accounting cleared.
If the Diamond trading companies value their future business they will cooperate with the government and reveal the accounting practices and show their legitimate sales verses their ligitimate expenses and be willing to pay the appropreate taxes on the income.
The question is: How many years back will the Government want to investigate and if they find tax evasion as far back as 10 years will they try to collect.
If that is the case then all the back taxes demanded to be paid will surely effect the present operating conditions and some companies would fold and go bankrupt.
Lets see what happens.