IEIM101350 - Exchange of Information: Key concepts: Foreseeable relevance and ‘Fishing expeditions’

Requests for information on a speculative basis are not permitted. There must be foreseeable relevance (IEIM101300) to a particular customer or group of customers. Customers in groups do not have to be individually identified.

Example 1 -the standard is not met

Jurisdiction X asks for details of all properties owned by its residents in Jurisdiction Y. Aside from difficulties in obtaining such information, this is a fishing expedition because there is no specific customer and liability for whom the information is sought. The request is speculative because it is made in the hope that some useful information can be obtained rather than being linked to a risk with an identifiable customer or group of customers. The standard of foreseeable relevance is not met.

Example 2 -the standard is met

Jurisdiction X knows that clients of a particular tax agent have taken part in an avoidance scheme which includes investment in a company in Jurisdiction Y. A number of these people are under investigation with significant potential tax liabilities. Tax authorities in Jurisdiction X have not succeeded in obtaining a client list from the tax agent despite exercising all their local information powers. A request is made to Jurisdiction Y to identify all investors in the company with an address in Jurisdiction X. The standard of foreseeable relevance is met in this request because it can be linked to an identifiable group of customers - investors in the overseas company - and an identifiable tax risk - the avoidance scheme.