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HMRC investigates UK resident customers of Euro Pacific International Bank

Sean Wakeman, Head of Tax Resolutions
05/08/2022
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UK resident customers of Euro Pacific International Bank face a double whammy of losing their monies should the Bank collapse and a simultaneous tax investigation which may be launched on a civil or criminal basis.

Background

The Puerto Rico Office of the Commissioner of Financial Institutions (OCIF) issued a Cease and Desist Order and suspended the operations of the bank on 30 June 2022 amid Money Laundering and tax evasion allegations. Not only does this place the future of the Bank in jeopardy but also HMRC appear to be waiting in the wings to target any UK resident customers who may have used accounts with ‘Euro Pacific International’ for tax evasion purposes. The latest moves follow action by global enforcement officials against suspected tax evasion and money laundering activities by clients of the Bank across the world.

What action should you take?

Any such individuals, businesses or companies should consult immediately with Crowe’s Tax Resolutions team so that immunity from prosecution may be negotiated via the Contractual Disclosure Facility, also known as Code of Practice 9 (COP9).

HMRC will be writing to Euro Pacific International Bank customers as early as the next few weeks. Consequently, anyone with a tax disclosure should approach Crowe with a view to making a disclosure at the earliest possible opportunity. An unprompted disclosure always stands a better chance of securing protection from prosecution and will significantly lower civil or monetary penalties.

How we can help

Euro Pacific International Bank will undoubtedly be writing to their own customers to offer reassurance on banking deposits. Nevertheless, no time should be wasted in taking independent tax advice where the bank will not be able to help.

There may be perfectly legitimate reasons for UK resident customers to have had accounts in such a remote jurisdiction (e.g. property ownership, family connections, domicile, birth etc.) but the existence and operation of such accounts needs to be examined critically to identify potential tax issues.

Early approaches to Crowe’s Tax Resolutions team should greatly assist the process of getting information, documentation and statements etc. from Euro Pacific International.

Other reasons for holding deposits with Euro Pacific International Bank could include scams involving ‘get rich quick schemes’, tax avoidance planning, investment ‘opportunities’ or just general ‘advice’ received from ‘a man down the pub’. In other words, the reasons why some people may find themselves in this difficult position may not always be connected with tax fraud; they might just involve naivety, stupidity or ignorance. None of these constitute tax evasion.

As well as potentially losing their monies with Euro Pacific International Bank, investors may also find themselves with a tax bill (unless prompt action is taken) that they will need to settle from other assets, if there are any. HMRC will have little sympathy for individuals who may lose monies, and can be expected to pursue sums with vigour.

For further information about how Crowe’s Tax Resolutions team can help, please get in touch with Sean Wakeman or your usual Crowe contact.

Contact us

Sean Wakeman
Sean Wakeman
Partner, Head of Tax Resolutions
London