Some EU member states are obstructing the fight against money laundering, tax avoidance and evasion, the EP committee of inquiry into the “Panama Papers” leaks concludes.
The Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) approved its final report by 47 votes to two with six abstentions on Wednesday, after an 18-month probe into breaches of EU law in relation to money laundering, tax avoidance and evasion.
The committee also approved the inquiry recommendations, by 29 votes for to two votes against, with 18 abstentions.
[The committee] highlighted how moves to counter tax evasion are often “blocked by individual member states.” It wants the Commission to use its authority to change the unanimity requirement on tax matters
The meeting opened with a minute’s silence as a tribute to Maltese investigative journalist Daphne Caruana Galizia, who was killed in a car bomb explosion on Monday. Ms Caruana Galizia gave the committee evidence about her work on the Panama Papers at a meeting in February 2017 in Malta.
MEPs expressed regret that “several EU member states featured in the Panama Papers.” They pointed to the “lack of political will among some member states to advance on reforms and enforcement.” This, they suggested, had allowed fraud and tax evasion to continue.
The committee was sharply critical of the secrecy surrounding the work of the Council’s Code of Conduct Group and highlighted how moves to counter tax evasion are often “blocked by individual member states.” It wants the Commission to use its authority to change the unanimity requirement on tax matters.
The committee backed a call for a common international definition of what constitutes an Offshore Financial Centre (OFC), tax haven, secrecy haven, noncooperative tax jurisdiction and high-risk country. It gave overwhelming backing to a call for the Council to establish by the end of this year a list of EU member states with “where Non-cooperative Tax Jurisdictions exist”.
It gave overwhelming backing to a call for the Council to establish by the end of this year a list of EU member states with “where Non-cooperative Tax Jurisdictions exist”.
The committee members also supported a proposal that any entity with an offshore structure should have to justify to authorities their need for such an account.
The committee stressed the need for “regularly updated, standardised, interconnected and publicly accessible beneficial ownership (BO) registers.” It also called for proposals to close loopholes which allow for aggressive tax planning as well as more dissuasive sanctions at both EU and national level against banks and intermediaries “that are knowingly, wilfully and systematically involved in illegal tax or money laundering schemes.”
Co-rapporteur Jeppe Kofod (S&D, DK) said: "Europe needs to get its own house in order before it can end the scourge of systematic money laundering, tax avoidance and evasion. It is clear that urgent reform is needed, not least within the Council Code of Conduct Group on business taxation. The citizens of Europe have a right to know what their national governments are doing - and not doing - in the Council to help end harmful cross-border tax practices.”
Co-rapporteur Petr Jezek (ALDE, CZ) suggested that the practices revealed by the Panama Papers were not inevitable: “Our conclusions are clear: had the EU and its member states played a more proactive role in the past, the problems revealed by the Panama Papers could have been avoided. They arose because EU legislation against money laundering and exchange of tax information was not properly implemented,” he said.
The setting up of the Inquiry Committee was triggered by the leak of personal financial information, collectively known as the Panama Papers, which revealed that some offshore business entities had been used for illegal purposes, including fraud and tax evasion.
The Inquiry Committee’s final report and recommendations will be put to a final vote by the full Parliament as a whole in Strasbourg in December.
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