FIU Intelligence Management Manager, Esther Sue
The Fiji Financial Intelligence Unit (FIU) says cases of profit shifting are becoming common in the country, with the highest case recording a value of $12.8 million last year.
Profit shifting is a technique used by multinational corporations to pay less tax than they should that involves a multinational corporation moving the profit it makes in the country where it manufactures products or sells goods and services into a tax haven.
FIU Intelligence Management Manager, Esther Sue says while profit shifting is not illegal, it gives suspicion to trade-based money laundering, which is then forwarded to the Fiji Revenue and Customs Service for investigation.
“We see that quite often in Fiji, with certain entities. One of the reasons why they do it is what we call profit shifting, so they might purchase the goods from another country for much cheaper, and then they will instead of invoicing it from the actual source company, the third party in another country will inflate the price of those particular goods.”
The FIU currently has a database of more than 21 million financial transactions to monitor and profile individuals and businesses to support domestic and foreign partners in their investigation.
418 reports of white-collar crimes were reported by the FIU to its partner agencies, linked to money laundering, corruption, tax evasion, drug trafficking, online scams, fraud, and related offenses.