Sven Giegold
Member of the European Parliament – Greens/EFA Group

Speaker of the German Green Delegation

Luanda Leaks: Big consultancy firms from Europe helped Angolan president’s daughter to hide billions in tax havens

The presumably richest woman in Africa, Isabel Dos Santos, apparently owes her wealth to a large extent to the support of her father and former Angolan President Jose Eduardo Dos Santos as well as to the support of Western consultancy firms. This is suggested by research conducted by around 120 journalists from 20 countries. Together they analyzed a data set of about 715,000 documents from the inside of the Dos Santos companies. They have now published their findings as “Luanda Leaks” in reference to the capital of Angola.

 

In recent years, Dos Santos and her entourage established a network of more than 400 companies in 41 countries, almost 100 of them in tax havens such as Malta, Mauritius and Hong Kong. These companies have repeatedly benefited from public contracts in Angola and preferential loans. Overall, the Angolan judiciary assumes that Dos Santos has enriched herself by more than one billion US dollars in Angolan state-owned corporations. In Angola, the judiciary has now launched investigations into the misuse of state funds, frozen accounts and confiscated company shares.

 

The scandal also focuses on large consulting, auditing and law firms that advised Dos Santos on how to construct opaque corporate networks and move assets to tax havens. Leaked documents prove the active support of Boston Consulting, PwC, KPMG and other well-known consulting firms in Malta, Portugal and Switzerland, among others.

 

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group, commented:

 

“We must not get used to this! This tax scandal is so outrageous that it would be negligent to look away. The Luanda Leaks show a parallel system by which the powerful and the rich circumvent their tax contributions to society. In Angola, money laundering and corruption come at the expense of millions of poor people. The European tax avoidance industry is one of the enablers of this parallel system. Law firms, accountants and consultants from Europe are actively helping to hide and launder money. Moving illegitimately gained assets to tax havens and money laundering by purchasing real estate and company shares in Europe must be brought to the attention of the authorities over here. The supervisory authorities in Europe must no longer tolerate an offshore industry that has made money laundering and tax evasion its business model. Banks are subject to strict requirements to monitor their clients’ transactions and are increasingly filing suspicious transaction reports since the revelations of the Panama Papers and other leaks. However, we still have a problem with monitoring the service sector. The tax avoidance industry continues to help disguise the origin of dirty money and move it to tax havens. In 2018, just 597 out of 77,252 suspicious transaction reports of money laundering in Germany came from the non-financial sector. The European Parliament wanted to abolish the self-regulation of lawyers, tax advisors and accountants when negotiating the Fifth Anti-money Laundering Directive, but EU Member States were reluctant to do so. The Luanda Leaks’ revelations are a call to the European Commission to rethink the self-regulation of the industry. When revising the auditing directive, we need a clear separation between auditing and lucrative consultancy work. At the same time, the Luanda Leaks also show that we must take action against money laundering, corruption and tax fraud at global level. ”

 

Link to the results of the research of the international consortium of investigative journalists:

https://www.icij.org/investigations/luanda-leaks/

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