Sunday, 22 December 2019
The Belgian tax authorities are investigating two new sets of banking leaks from London and the Isle of Man, documents which contain 11,000 links to Belgian taxpayers.
The news comes in reports in Le Soir, De Tijd and Knack, whose reporters are members of an international consortium of investigative journalists which previously published the revelations in the Panama Papers.
Last month Cayman National Bank (CNB), based on the Isle of Man, issued a statement saying it had been the subject of a “data hack”. The huge volume of data – 2.26 terabytes of documents – landed on the internet, on the website of the so-called “transparency collective” Distributed Denial of Secrets, and contains information on the activities of CNB and its sister company Cayman National Trust Company (CNTC).
The Isle of Man was implicated in a previous mass leak of banking documents known as the Paradise Papers, which alleged that Formula 1 champion Lewis Hamilton had cheated on VAT payment for his private jet.* The island has different tax rules to the United Kingdom, and is home to many offshore financial companies. Both CNB and CNTC trace back to the Cayman Islands, one of the world’s leading tax havens.
The three Belgian publications were given access to the leaked documents, and carrying out a simple search for the words “Belgium” and “Belgian” found about 11,000 references. However on examining in detail 853 of the documents concerned, the reporters found that most were only passing references to Belgium, including correspondence with a banking federation based here, references to EU directives and planning for attendances at the Belgian Grand Prix.
They did, on the other hand, find a number of concrete references to cases of apparent tax evasion linked to Belgian individuals. According to Kristof Clerix writing in Knack magazine – the only one of the three publications to publish outside of a paywall – since no links were found to public figures, details of individual cases have been made anonymous before publication.
One such case concerns payment orders totalling half a million euros from an Isle of Man company to the Belgian bank account of a Dutch scientist, described as loans or consultancy fees. In another case, the account of a Belgian resident received payments of €200,000 in total from another Isle of Man company, with vague mentions such as “payment as agreed”.
At the current stage of the investigation, such dealings cannot be assumed to be illegal, but they are enough to arouse the interest of the special investigations unit of the Belgian ministry of finance, which is home to the tax authorities.
The same goes for the contents of another leak, this time from the British company Formations House, based in London and a provider of shell companies that often consist of no more than a post box. This more recent leak occurred on 4 December, and followed the same route to exposure as the CNB leak. But the media had obtained the data four months prior to that, and found among other revelations that Formations House harboured companies with links to the Hell’s Angels in Sweden and the Italian Mafia.
In all, Formations House offered connections to 400,000 companies, including known money launderers and tax evaders. A group calling itself the Organised Crime and Corruption Reporting Project (OCCRP) posted a video on You Tube that explains briefly how a company operating openly in the capital of the UK can offer services to criminals, fraudsters, gangsters and even the Iranian state oil company trying to avoid international sanctions. Formations House has been taken over since the time the documents refer to, and the current owner told the media the company has no say over what the companies it registers get up to after they have been set up.
The Formations House leak is smaller than that from the Isle of Man – 400 gigabytes of data containing 17 million emails. There were only around 1,800 results for a search of the terms Belgian and Belgium. Again, no public figures were named. Those who are named can look forward to their dealings being scrutinised carefully by the tax authorities in the near future. “The data have been made secure by the Belgian Internet Service Center [sic] and are currently being prepared for analysis,” said Francis Adyns, spokesperson for the federal finance ministry. “The data from Formations House require more advanced preparation given the many scanned documents involved. Any Belgians potentially involved have not yet been identified.”
The Brussels Times
* The Brussels Times has been contacted by a consultancy representing the Isle of Man governmment, asking us to publish the following clarification:
“Following the request from Isle of Man Government for HM Treasury to investigate the overall regime, HM Treasury produced its findings in 2019 confirming that “UK and EU VAT law had been correctly implemented in the Isle of Man and allegations of widespread VAT avoidance on aircraft and yachts were not upheld.” Thus, no such cheating occurred.”