Due to the revelations in the Panama Papers, the EU Parliament’s Committee of Inquiry is taking up its work to expose money laundering, tax avoidance and tax evasion.

The first session of the so-called PANA Committee took place on Tuesday, 27th September 2016 in the EU Parliament. At the centre of this Committee of Inquiry are practices concerning money laundering, tax avoidance and tax evasion in relation to current EU law. The data leak is the largest of recent years and has revealed opaque structures, whose only objective it is to conceal assets. To kick off the work of the Committee of Inquiry, six journalists, who cooperate with the ICIJ Consortium with regard to the Panama Papers, were invited to the EU Parliament to talk about their work, to present their findings and to discuss political consequences.

To begin with, Frederik Obermaier, one of the two journalists of Süddeutsche Zeitung, to whom the documents were leaked, spoke of the significance of the Panama Papers. The data, which had been passed on by a whistleblower, helped to uncover 2.8 terabyte concerning 214,000 letterbox companies, some of them with very prominent owners. “What is needed now is decisive action; and don't let yourself be influenced by the financial lobby” pleaded Obermaier with MEPs.

Christoph Clerix, Belgian journalist at Knack, reports that frequently the same (Belgian) surface in various leaks, such as Swiss Leaks, Panama Papers, Bahamas Leaks and that in many cases economic beneficiaries in Europe are responsible for the actual concealment. Law firms such as Mossack Fonseca are only part of the overall structure, in which European banks or asset managers also play a key role. Oliver Zehlmann of Swiss paper Le Dimanche, explained how a loophole in Swiss legislation results in letterbox companies de facto having no owners and therefore nobody could be held responsible.

Julia Stein from North German Radio demonstrated, how easy it is to set up letterbox companies and how customers are recruited. Jan Strozyk, also from North German Radio, concentrated on the structures between actual economic beneficiaries and Mossack Fonseca. These include banks, asset managers, law firms and similar who adopt the role of broker and often have an office in Europe. In Germany, six of the seven major banks offered access to offshore structures. And yet, banks in comparison to other actors are subject to relatively strict controls. Law firms and similar institutions are rarely subject to legal provisions. In Finland, reports Nina Knus from the Finnish Broadcasting Company, they would currently struggle with the fact that the state would like to have access to the Panama Papers and has sued accordingly.

 

Possible fields of action for the EU Parliament

The questions of MEPs regarding possible political action approaches were answered clearly: first and foremost more transparency was required! The success of letterbox constructions lies above all in the fact that the actual economic beneficiaries do not appear. This anonymity could be met with corresponding registers in countries and an exchange of information between states. However, increased enforcement of current law could also bring progress. In addition, it was a concern of the journalists to improve the protection of whistleblowers. The interests of the society had to be above those of individual corporate interests.

Further information

Panama Papers: Parliament decides on Committee of Inquiry

PANA-Committee of Inquiry