Authority rejects claim

The head of the Samoa International Finance Authority (S.I.F.A.) has refuted claims that Samoa had assisted Australian citizens in tax evasion.

In an email to the Sunday Samoan, the Chief Executive Officer (C.E.O), Alosamoa Erna Vaai-Aiono, rejected claims made in an article printed in The Australian newspaper earlier this month, which labelled S.I.F.A as a “secretive financial centre Samoa structured to get around Australian tax law.”

Alosamoa unequivocally rejected the claim.

“The Authority was never established to evade Australian or any other country's tax laws,” Alosamoa responded in an email.

“The Authority has been around for over two decades and it was never set up to avoid Australian tax laws.” The claim was raised by The Australian in its coverage of a multimillion-dollar tax fraud court case that has recently seen judgement in the Australian Federal Court.

According to The Australian, after sitting in Samoan archives for 20 years, the documents listing Vanda Gould as the owner of Hua Wang Bank Berhad, registered in the South Pacific tax haven, were handed over to the Australian Tax Office (A.T.O.) in October, under a wide-reaching tax information exchange agreement.

Mr. Gould, a defendant in the case, is an accountant and (was) Chairman of listed investment company CVC.

However, the barrister representing the offshore companies in the case (one of which is the Bank here in Samoa), John Hyde Page, told the Federal Court it should instead accept evidence from London-based businessman, Ian Gowrie Smith, who owns Papua New Guinea’s Conflict Islands, that he formerly owned the bank.

Mr. Hyde Page told the court the A.T.O.’s position was “impossible to reconcile” with legal authorities that determined the place where companies were controlled and taxed through “a formal test rather than a test that looks to substance”.

Mr. Gould told The Australian the A.T.O. maintained that Hua Wang Bank was a resident of Australia “because of my involvement as an adviser”.

“The A.T.O. does not accept the authority of the leading High Court decision called Esquire Nominees which, if applied in the present situation, would clearly mean the Hua Wang Bank is a non-resident of Australia for income tax purposes,” he said.

A confidential application form filed with Samoa’s registrar of international and foreign companies in 1994 identifies Mr Gould as owning 100 per cent of Hua Wang Bank, which the A.T.O. alleges was used by Mr Gould’s clients to avoid tax.

In the judgement, published on the Court’s website, presiding judge the Honourable Justice Nye Perram found in favour of the Australian Tax Office (A.T.O.).

Mr. Gould has since resigned his post at CVC following the conclusion of the court case.

The ruling, which came down on December 19, from the court case is 115 pages long, covering more than just Mr Gould’s and the other defendant’s involvement in Samoa, but also other jurisdictions.

In it’s conclusion, Justice Perram did not mince words in his findings.

“The facts I have found strongly suggest widespread money laundering, tax fraud of the most serious kind and, possibly in some instances, insider trading,” his verdict reads. “The conduct revealed in this case is disgraceful.”

S.I.F.A., and subsequently Samoa became involved in the case when the A.T.O. lodged tax information exchange agreement, which Alosamoa eventually provided to them.

According to The Australian, the application was made for the documents in May 2012, they were handed over in October this year and only tendered to the Court last week.

“In its information request to the Samoan authorities, the A.T.O. alleges Mr Gould’s clients set up Samoan super funds through a subsidiary of Asiaciti, contributions to which were then claimed as income tax deductions,” the newspaper reports.

“While the A.T.O. first asked for information about Hua Wang Bank in May 2012, the Federal Court documents show Samoa did not produce an “interim response” until August 26 this year, followed by additional documents on October 17.

“Last month, Justice Perram allowed the A.T.O. to reopen its case to introduce the new evidence, which conflicts with testimony given by Mr Gowrie Smith last October.”

When asked about the length of time it took to provide the documents, Alosamoa cited “ongoing litigation at the time of request”.

Whether this litigation is the court case at hand, she did not say.

“We confirm that we have provided information to the Australian Tax Office via our Ministry of Revenue as the competent authority responsible for the exchange of information for tax purposes under our Tax Information Exchange Agreement with Australia,” Alosamoa says.

“The delay was due to on-going litigation at the time of the request.”

Asked if S.I.F.A. profited from the Bank, she said no.

“The only fees collected by the Authority were for the licensing fee for Hua Wang Bank and the annual renewal fee for its license,” she said.

According to Justice Perram’s ruling, he will hear the defending parties on costs in the new year.