THE ANZ Bank has sought court orders to block the Australian Taxation Office from accessing the confidential records of 13,000 customers of its Vanuatu operation in a dramatic escalation of the ATO's investigation into tax havens.
A high-powered legal team representing the ANZ, which has the largest Vanuatu operation of the four major banks, lodged Federal Court documents that effectively argue the tax office is engaged in a fishing expedition as part of the Project Wickenby crackdown on tax avoidance.
The bank says in its statement of claim that compliance with two December 17 notices from the ATO, which seek open access to customer data, would breach Vanuatu criminal law and put its licence to operate in the Pacific island nation at risk. It adds that each of the notices is "uncertain and/or oppressive".
The ANZ's chief executive for the Pacific region, Michael Rowland, said the bank was seeking court guidance on its obligation to comply with the ATO notices.
"ANZ abides by the legal and regulatory requirements of the markets in which we do business, including Vanuatu, and we treat customer information sensitively and respectfully," he said.
"We've been working with the ATO to resolve this matter for more than 18 months, and we have co-operated as much as possible with the ATO's request while meeting our obligations under Vanuatu law."
The ANZ has hired two QCs to press its claim, including Melbourne silk Alan Archibald. The case is set down for a directions hearing on February 17.
Last April, it was reported that the ATO had demanded that 57 financial institutions, including the four major banks, hand over the records of clients with offshore bank accounts held between July 2005 and June last year.
Project Wickenby - a $300 million multi-agency taskforce that includes the Australian Crime Commission - has enjoyed some successes on the revenue front, hitting its targets with tax bills worth $951.6m and recouping $229.5m. But there have been some high-profile failures, notably the collapse of the ACC's five-year criminal investigation into actor Paul Hogan and John Cornell.
The agency spent $10m on the Hogan probe, dubbed "Operation Youghai", which was more than half the $17.3m allocated to the ACC to investigate all Wickenby cases over the same period.
The ANZ has previously been dragged into another Wickenby investigation, "Operation Starlifter", which targeted participants in a $100m money-laundering scheme allegedly masterminded by accounting firm PKF Vanuatu's senior partner, Robert Agius.
The Commonwealth Director of Public Prosecutions dropped the money-laundering charge against Mr Agius last September, but there are two remaining charges relating to a $100m round-robin scheme.
The Australian reported in 2008 that the ANZ and Westpac, which also has a Vanuatu business, issued most of the accounts in Mr Agius's scheme.
Both banks were understood to have worked closely with the Australian Federal Police during the investigation.
The ANZ statement of claim said the current circumstances were different. Rather than identifying a particular customer who might have an Australian tax issue, the bank says the ATO has issued a generic inquiry.
It has demanded, under the first of two notices, information about ANZ customers in Vanuatu who fit one or more of four criteria, including Australian nationality or domicile, a residential or business address in Australia, or an account recorded in Australian dollars.
The ANZ statement of claim said the current circumstances were different. Rather than identifying a particular customer who might have an Australian tax issue, the bank says the ATO has issued a generic inquiry.
It has demanded, under the first of two notices, information about ANZ customers in Vanuatu who fit one or more of four criteria, including Australian nationality or domicile, a residential or business address in Australia, or an account recorded in Australian dollars.
The information sought from the ANZ's "global information warehouse" relates to the period July 1, 2008, to November 30 this year.
It includes the account number, any identifiers of the customer, nationality and domicile, and the tax file number or Australian business number of the customer or signatory.
Under the second notice, the ATO is targeting similar information from ANZ customers with accounts kept in any currency other than the vatu, Vanuatu's currency. The ATO notices mention 17 different types of accounts, but are not limited to those accounts, or to accounts held in Vanuatu.
The ANZ says it would breach Vanuatu confidentiality laws if it gave up the information.
It would also be a criminal offence if the bank surrendered information relating to international companies and trusts.
Furthermore, the bank would risk losing its banking licence.
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