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The authorities’ efforts to combat economic crime: More and more cases dropped due to lack of capacity - Document no. 3:3 (2008-2009)

The Tax Administration, the Customs and Excise Service and the Labour and Welfare Service carry out too few controls, and their coordination of control activities in their work to combat economic crime is inadequate. The police and the prosecuting authorities are also a bottleneck as regards following up criminal complaints.  ‘Economic crime has considerable costs for society. It is important, therefore, that the authorities give priority to efforts in this field,’ says Auditor General Jørgen Kosmo.
Published 11/11/2008 1:20 PM

The Office of the Auditor General’s investigation into the authorities’ efforts to combat economic crime, Document No 3:3 (2008–2009) was submitted to the Storting on 6 November 2008. The investigation covered the efforts of the Tax Administration, the Customs and Excise Service, the Labour and Welfare Service and the police and prosecuting authorities in this field during the period 2004 to 2007.

The investigation shows that the proportion of cases that are dropped because of lack of capacity has increased considerably during the period. The proportion of cases dropped due to lack of capacity is particularly high in Oslo police district. There is also great variation between police districts as regards the percentage of economic crime cases that are solved. ‘If reported cases are not followed up, this can have a negative effect on people’s willingness to report punishable offences, which, in turn, can encourage some people to break the law in this area,’ says Mr Kosmo.

The investigation shows that the police and prosecuting authorities have not succeeded in including confiscation of the proceeds of criminal offences as part of the investigation of economic crime.

Central instructions and guidelines have been issued by the Tax Administration, the Customs and Excise Service and the Labour and Welfare Service about which violations of the law are to be reported to the police and prosecuting authorities. The investigation shows that there is considerable variation between regional entities within the same service with respect to which violations of the law are reported, and also with respect to what amounts have to be involved to trigger an criminal complaint.

The proportion of enterprises in which the Tax Administration and the Customs and Excise Service have carried out tax audits and controls has fallen during the period 2004 to 2007. ‘Since tax audits and controls are central tools in these services’ efforts to combat economic crime, the reduction in such audits and controls is not in accordance with the requirement for increased efforts in this area,’ says Mr Kosmo.

The Ministry of Justice and the Police agrees that it may be unfortunate from an equal treatment perspective if variations between police districts reflect differences in the treatment of cases involving economic crime. The Ministry points out that the Government will continue to make endeavours to ensure that cases are not dropped on the grounds of lack of capacity. The Ministry of Justice and the Police shares the Office of the Auditor General’s view that confiscation of the proceeds of economic crime should be used to a greater extent than at present. In order to ensure more uniform follow-up of crimes, both the Ministry of Finance and the Ministry of Labour and Social Inclusion will follow up the practice of their subordinate agencies with respect to reporting violations of the law.

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