Following a call from the Greens / EFA Group in the European Parliament, the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA Committee) was established in June 2016 to investigate the Panama Papers scandal.
During the last year we have seen more tax evasion and money laundering scandals coming to light. The Bahama leaks, Football leaks, Malta leaks, the Russia Global Laundromat or the Azerbaijan Laundromat only two days ago have shown the extreme scale of tax evasion, tax avoidance and money laundering that we face.
The preliminary conclusions of the committee were published in June 2017 and already includes many priorities that we as Greens have been pushing for. However, we believe more can be and should be done.
So, what are the top recommendations and proposals that Greens tabled which we believe should also be included in the final inquiry report?
1) Go after those who broke the law: The European Commission should sue some Member States for breach of EU law as evidenced by Panama Papers and other leaks. Also, a permanent Committee of inquiry should be established by the European Parliament in order to continue investigating scandals.
2) Spend EU funds wisely: It needs to be ensured that no EU funds are directly or indirectly used to help tax evasion and avoidance. Also, the EU Public Procurement Directive should be changed to make it impossible for companies operating in tax havens to access public procurement.
3) Explain why you go offshore: It should be made obligatory for companies to justify the economic reason, if any, for being established off-shore. In addition, a new EU definition of permanent establishment should be approved to make all companies pay their fair share in countries where their profits are created, including those on the digital market.
4) Harmonise EU tax rules: The Member States should agree rapidly on the proposal for a Common Consolidated Corporate Tax Base, as a first step towards applying a minimum tax rate in Europe, in order to avoid a race to the bottom in the name of tax competition.
5) Whistle the end of the match for doubtful football transfers: Regarding the so called “Football leaks”, the football transfers should be assessed in the light of the EU competition and anti-trust rules. Concerning the intermediaries, proposal should be also tabled to ensure that fines and pecuniary sanctions received by tax dodgers and intermediaries are not tax deductible, something that is still possible in some countries.
6) EU to lead by example internationally: No trade agreement should be negotiated with any country on the tax haven blacklist. Also, the European Union should fully support the establishment of a UN Tax Body.
7) Ensure intermediaries are being watched: A legislative proposal for the separation of accounting firms and financial or tax services providers should be tabled as well as a legislative proposal to prohibit the self-regulation of obliged entities according to AMLD.
8) Invest in the fight against money laundering: The cooperation between the Financial Intelligence Unites within the EU needs to be improved. Also, the financial resources for Eurojust and Europol should be improved by the Commission and it should assess the possibility to create a European Financial Crime Centre coordinated by Europol.
9) Protect whistleblowers: There would have been no Panama Papers in the first place without John Doe, who took the risk to expose such scandal. Effective whistle-blower protection should be guaranteed by an legislation covering everyone acting in the public interest.
10) Give the European Parliament more tax powers: New tax proposals should be made by the European Commission under the co-decision procedure with the full involvement of the European Parliament under the conditions presumed by the Treaty. (tax decisions are for now taken by the 28 Member States only if they unanimously agree on a proposal).
The final report of the PANA Committee is a great opportunity to make a strong call for concrete anti-tax evasion and tax avoidance and anti- money laundering reforms. It is now for the European Parliament to seize this opportunity.
The amendments of the Green Members of the PANA Committee can be found here:
Co-rapporteurs’ draft reports on the committee’s findings and recommendations:
Mandate of the PANA Committee: