The Panama Leaks committee of inquiry this week dealt with the facilitation of letterbox companies.
The Green MEPs in the committee of inquiry of the European Parliament had commissioned a new study based on the Offshore Leaks Database, which they presented to the Committee. It names the participants facilitating letterbox companies and shows where these are based. Those involved are lawyers, bankers and accountants, who earn vast sums from facilitating such transactions for tax evasion and money laundering via Panama. The alarming result: of the 140 identified intermediaries, 127 have a branch in Europe.
According to the study, lawyers and accountants are still facilitating letterbox companies completely unchallenged. However, in doing so, they are playing a vital role in the evasion of tax because their intermediate activities render the disappearance of dubious transactions behind letterbox companies only possible in the first place.
On the results of the study: Asia, in particular Hong Kong, Taiwan and Singapore, continues to be the absolute hotspot. But also Europe and the US there are active participants in the dubious business of intermediation.
In Europe international intermediaries particularly frequently settle in Great Britain, Switzerland, and Luxembourg. If one compares the EU Member States, one can see that 50 % of all intermediaries are registered in the UK, with 23 % in Luxembourg. In contrast, only 3.5 % of the intermediaries are registered in France and Germany.
Among the top 20 are some illustrious names, including those of major European banks and renowned consulting firms such as Deloitte, KPMG and Ernst & Young.
Hence, the Committee demanded new control mechanisms, which shall apply to intermediaries. Self-regulation is not sufficient to put a stop to the transactions of financial intermediaries. What is needed are legal measures. However, looking at the power of financial lobbyists in the EU, this will be a difficult task.
Gabriel Zucman, a renowned tax haven expert, has summarised his doctrines for the Chamber of Labour as follows: “What does the Panama Leak teach us? The regulation of the sector concerning wealth protection and the countries that harbour them must be fundamentally reconsidered.”