A sophisticated tax evasion scheme, based in the tiny European principality of Liechtenstein, was offered to Irish residents in the 1980s and was explored by a number of prominent Dublin business figures. An RTE investigation has discovered that this scheme is very similar to the Ansbacher accounts but provides a more elaborate and secretive structure. Details of the scheme are outlined in a secret memorandum, which has been obtained by RTE.
The evidence of the proposed tax evasion scheme is contained in a report of a fact finding mission to Zurich in August 1984, which explored how Liechtenstein Trust arrangements could be deliberately used for tax evasion by Irish residents. It details a number of meetings with representatives of prominent international banks and accountants who were consulted on different aspects of the scheme. RTE understands that the detail of this memorandum was explored by a prominent business figure in Dublin.
The Liechtenstein arrangement mirrors many of the characteristics of the Ansbacher Cayman Trust operation but goes further when it comes to providing a smoke screen to protect the identity and activities of tax evaders. According to the memorandum the main detail of the scheme was explained by an Irish chartered accountant, who worked at the time for a Zurich-based finance company. Contact with this man had been arranged through an accountancy firm based in Dublin.
The memo describes how the scheme would create what it calls "an opaque screen" between the Irish depositor and his money in Liechtenstein. It explains how in theory the Irish depositor is placed at least one step removed from his money and from the trust itself. Under the scheme, the Irish depositor places his money with the accountants in Zurich. They in turn transfer it to a Liechtenstein-based trustee who manages the money held in trust. The trustee in theory decides who the beneficiary will be, but in reality he takes instructions from the Irish depositor. In the Liechtenstein scheme the names of beneficiaries are never written down.
What the memo calls "the real secret" lies in the fact that under Liechtenstein law the Irish depositor can direct exactly how his money is to be handled while at the same time claiming that he does not own the money. The memo stresses that the Irish depositor: "..should never under any circumstances disclose to any person whatsoever in his own jurisdiction the existence or arrangements for the trust." It also states that "there should never be any correspondence..(The accountancy firm)..will operate on straightforward telephone instructions." It goes on to state that "no documents concerning the arrangements whether as regards setting up or operating should ever come into Ireland nor should any meetings be held in Ireland." The memo also points to "the possible danger that a descendant might well blow the gaffe on the whole thing in years to come by failing to have a true understanding of the nature of the set-up." The memo says the money is held in an account, in the name of the Liechtenstein trust, in a bank in Zurich.
One of the mysteries remaining in the whole Ansbacher affair is where did the money go? Detailed examination of the Ansbacher deposits showed that they had been reduced from hundreds of millions of pounds in the 1980s to about £4m by the early 1990s. This revelation that another sophisticated scheme for offshore tax evasion was being explored in the mid-1980's is disturbing. The authorities will now have to investigate if this scheme was put into operation and whether substantial sums of money were put into it.
This evening, Fine Gael has urged the Revenue Commissioners to immediately investigate the latest tax evasion scheme. Michael Noonan described it as a matter of serious concern. He also said that the Minister for Finance should also order his officials to study the memo, which is in the hands of RTE, to see if there is a gap in the law.
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