The Committee of Inquiry into the allegations
contraventions and maladministration in the application of Union
law in relation to money laundering, tax avoidance and tax evasion
adopted by Jeppe KOFOD (S&D, DK) and Petr JEŽEK (ALDE, CZ)
on the inquiry into money laundering, tax avoidance and tax
evasion.
As a reminder, on 8 June 2016 Parliament set up a
Committee of Inquiry to investigate alleged contraventions and
maladministration in the application of Union law in relation to
money laundering, tax avoidance and tax evasion (PANA).
This Committee was set up after the publication of the
so-called ‘Panama Papers’ which constitute the
biggest leak of information on money laundering and tax avoidance
and evasion to have happened to date.
Members welcomed the fact that the Council is aiming
to establish by the end of 2017 a ‘common EU list of
non-cooperative tax jurisdictions’. They noted, however,
that the screening process, as conducted and overseen by the
Subgroup on Third Countries of the Code of Conduct Group
(Business Taxation), is not fully transparent and does
not allow the Parliament to exercise its scrutiny
powers.
The report regretted that a large number of
stakeholders have refused to meet with PANA delegations, or refused
to appear before the PANA Committee, or did not answer questions in
a satisfactory manner.
Members also condemned the assassination of the
Maltese journalist Daphne Caruana Galizia who had reported
extensively on the Panama Papers and on 16 October 2017 was
assassinated in a car bombing.
The main conclusions of the commission of inquiry
are:
- more political will, better regulation and stronger
enforcement and monitoring of existing rules is needed to
counter the practices of minimising or not paying taxes, laundering
money, both offshore and onshore;
- through shell corporations, tax havens and complex
financial structures, some multinationals and wealthy individuals
have succeeded in concealing their capital from the tax authorities
and have thus benefited from a legal vacuum allowing them to
withdraw their wealth and escape tax;
- the absence of a common definition as to what
constitutes an offshore financial centre (OFC), a tax haven, a secrecy haven, a non-cooperative tax
jurisdiction or a high-risk country in terms of money laundering;
the absence of single definitions constitutes one of the main
factors preventing the adoption of adequate and effective
legislation to counteract tax avoidance, tax evasion and money
laundering;
- the lack of cooperation and coordination
between and among the EU institutions and agencies, Member States
and competent authorities on different pieces of legislation with
regard to tax evasion, tax avoidance and money laundering is a
systemic problem;
- some Member States tend not to provide relevant
information in the desired quantity
and quality and in general do not seem to exert genuine efforts to
crack down on tax avoidance and tax evasion;
- exchange of information, adequate
enforcement and continuously
improving combating techniques are key in fighting tax evasion, tax
avoidance and money laundering; public country-by-country reporting
of tax information by all large companies is warranted;
- that proper identification of UBOs remains a key
obstacle to eliminating illegal tax avoidance schemes; Members
concluded that there has been a significant gradual improvement in
terms of having a register of UBOs with accessibility based
on legitimate interest;
- the creativity of tax avoiders is faster than the
formulation of legislation, and that intermediaries and enablers
tend to stay on the right side of the law through creative
compliance;
- binding international rules and standards should be
established in order to better regulate and define wealth
management profession;
- a common EU approach to combat shell and
letterbox companies in third countries and OCTs and ORs is needed,
and to put an end once and for all to practices designed to avoid
paying the fair amount of taxes in the EU, on the basis of
transparency on the part of the ultimate beneficiaries;
- the Commission is not sufficiently equipped
in terms of resources to ensure full enforcement
of the EU legislation against money laundering, tax evasion and tax
avoidance;
- tax policy issues at Council level are often blocked
by individual Member States, in order
to protect tax havens; Members called for the abolition of the
principle of unanimity of the Member States in tax
matters;
- Member State institutions in charge of implementing
and enforcing rules as regards tax fraud and money laundering need
to be entirely independent from political
influence;
- sanctions are not always
applied or sufficiently deterrent in relevant cases; Members
deplored the fact, in this context, that Member States continue to
oppose the imposition by the EU of sanctions on third countries
whose tax systems are regarded as damaging to the
Union.
Members concluded that on the basis of the PANA
Committee’s findings, several cases of
maladministration with respect to EU legislation can be
identified, namely regarding:
- the absence of spontaneous communication of tax
information from the competent authority of one Member State to
another Member State if it has reason to suppose that there may be
a loss of tax revenue in the other Member State;
- the failure of the Member State authorities to
act upon the evidence of a serious and persistent failure to
identify the beneficial owners for the application of the customer
due diligence requirements of the Third Anti-Money Laundering
Directive and the failure of the Commission to ensure the effective
application of this Directive;
- the Commission's failure to provide a list of third
countries with strategic weaknesses in their anti-money
laundering regimes;
- failure of Member States’ authorities to
apply administrative penalties and
other administrative measures to institutions found liable
regarding serious infringements of the national provisions adopted
pursuant to the Third Anti-Money Laundering Directive;
- the lack of sincere cooperation by the Member States in the framework of the Code of
Conduct (Business Taxation) group.
Given that a number of questions remain unanswered
regarding the goal of fully ascertaining the scale of this issue,
Members suggested the continuation of the inquiry tasks within a
permanent committee or high-level working group within the
European Parliament.