HM Revenue and Customs (HMRC) has been applying for freezing orders on UK-owned accounts at a Caribbean bank that was forced into administration two years ago (CRN, 9 October 2006).
First Curacao International Bank (FCIB), based in the Dutch Antilles, became popular with components and mobile phone traders after their UK accounts were closed down by all of the major UK banks concerned about VAT carousel fraud.
Many of the traders have since gone out of business due to a combination of HMRC’s Extended Verification policy and the continuing FCIB debacle.
According to sources close to the situation, HMRC needs the freezing orders in place because it is in the process of multiple legal hearings in the UK over its Extended Verification process, many of which involve traders with accounts at FCIB. Only once the HMRC case has been proved unsuccessful can funds start to be released.
Law firm Dass Solicitors, which represents a number of traders affected by the action, is gearing up for a prolonged fight with HMRC.
Alias Dass, partner at Dass Solicitors, said: “We are talking about hundreds of millions of pounds being withheld. We will continue to fight this and I am confident of getting some of the money back.”
Anthony Elliot Square, former chairman of the Federation of Technological Industries, which represents mobile phone and components traders, condemned HMRC’s actions.
“This situation is based on an assumption by HMRC that everybody is crooked. Traders place their money somewhere in good faith and because of unproven allegations they are unable to get it back,” he said.
HMRC was unavailable for comment at the time of going to press.
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