Panama Papers Committee: Greens call for tough action by the EU
Today, all political groups handed in their amendments to the final report of the European Parliament’s Inquiry Committee investigating the Panama Papers. Following the Panama Papers leaks, the European Parliament decided on 8 June 2016 to set up an Inquiry Committee (PANA Committee) to investigate alleged contraventions and maladministration in the application of Union law in relation to money laundering, tax avoidance and tax evasion. The mandate of the Committee takes the Panama Papers as a starting point, but is not limited to the scandal. A year later, at the end of June 2017, the co-rapporteurs presented their draft report on the findings as well as their recommendations of the Committee. Until today, the members of the PANA Committee have been able to table their amendments to the draft report. In the weeks to come, rapporteurs and shadow rapporteurs will have to reach compromises, which the Committee is expected to vote on 18 October.
MEP Sven Giegold, Coordinator of the Greens/EFA group in the PANA committee commented:
“Ensuring tax justice, fair competition and effective prosecution of financial criminality is crucial to foster the credibility of the European Union. When it comes to money laundering and tax avoidance, many Member States only stand and watch. The Maltese government is even itself involved in business with letterbox companies and does not draw any serious consequence. The Member States concerned must now clean up at home and agree to an EU-wide public transparency register of the beneficial owners of companies and trusts. To end the Member States’ ominous race to the bottom, we need a common minimum corporation tax rate in the EU. The Commission must further increase the number of staff to combat financial crime and to monitor Member States more effectively. If the Member States continue to delay measures against tax avoidance, the EU Commission must submit their proposals under the majority voting procedure (Article 116 TFEU).
Unfortunately, the work of the PANA Committee has been impeded massively. Numerous responsible firms and politicians refused to attend hearings in the Parliament. The Council and the Commission kept decisive documents under wraps. The insights from most of the transmitted documents cannot be made public by the Investigation Committee. The final report including our own amendments therefore only display half of the truth. Thereby, Council and Commission deprive the public of a large part of the insights gained by the PANA Committee. We demand a permanent Investigation Committee in the European Parliament comparable to the one of the US Senate, in order to effectively oppose infringements of Union law.”
Most important Green addings to the PANA Report
Maladministration by Member States regarding the following Union laws:
- Anti-Money Laundering Directive (i.e. identification of beneficial owners of companies and trusts, supervision of obliged entities such as banks and law firms),
- Capital Requirements Directive (i.e. application of administrative penalties to institutions found liable of serious breach of the Anti-Money Laundering Directive, suitability requirements for banks’ shareholders, fit and proper requirements for banks’ management body)
- Directive on Administrative Cooperation (i.e. exchange of tax-related information between EU countries)
Breach of the principle for sincere cooperation under Article 4(3) Treaty on the European Union by Member States
Involvement of the Maltese government in the Panama Papers scandal
Luxembourg helped to circumvent the Savings Tax Directive and tolerated the establishment of a tax avoidance business
Member States blocking progress against harmful tax measures in the Council Code of Conduct Group on Business Taxation
Risks of money laundering stemming from insurance products
Lack of customer due diligence obligations for intermediaries
Fragmentation of supervision powers for the financial sector
Most important Green addings to the PANA Recommendations
Start of infringement procedures against Member States for breach of EU law such as the Anti-Money Laundering Directive, the Capital Requirements Directive and the Directive on Administrative Cooperation
Establishment of a permanent Committee of inquiry in the European Parliament in the mode of the US Congress
Improve cooperation between the Financial Intelligence Units within the EU
Increase financial resources for Eurojust and Europol
Assess the possibility to create a European Financial Crime Centre coordinated by Europol
Agree on a minimum tax rate in Europe, at least in a revised Interest & Royalty Directive
Present new tax proposals under the co-decision procedure with the full involvement of the European Parliament under the conditions presumed by the Treaty.
Enact an obligation for Member States to answer group requests in tax matters
Agree on a new EU definition of permanent establishment to make all companies to pay their fair share in countries where their profits are created including those on the digital market
Separation of accounting firms and financial or tax services providers
Stop the self-regulation of obliged entities when it comes to supervising the Anti-Money Laundering Directive
Make changes to the EU Public Procurement Directive to make it impossible for companies in tax havens to access public procurement
Include effective whistle-blower protection in the Fifth Anti-Money Laundering Directive.
Ensure that fines and pecuniary sanctions received by tax dodgers and intermediaries are not tax deductible
Assess football transfers in the light of the EU competition and anti-trust rules
Support the establishment of a UN Tax Body
Stop the Commission to negotiate trade agreements with countries on the tax haven blacklist
The amendments of the Green Members of the PANA Committee can be found here:
https://sven-giegold.de/wp-content/uploads/2017/09/Greens-EFA-AMs-on-PANA-report-FINAL.pdf
https://sven-giegold.de/wp-content/uploads/2017/09/Greens-EFA-AMs-on-PANA-recommendations-FINAL.pdf
Co-rapporteurs’ draft reports on the committee’s findings and recommendations:
https://sven-giegold.de/wp-content/uploads/2017/07/PANA-DRAFT-REPORT.pdf
https://sven-giegold.de/wp-content/uploads/2017/07/PANA-DRAFT-RECOMMENDATION.pdf
https://sven-giegold.de/wp-content/uploads/2017/07/PANA-Overview-of-activities.pdf
Mandate of the PANA Committee:
https://sven-giegold.de/wp-content/uploads/2017/07/PANA-Mandate.pdf