EU Nations Set Up Panels, ‘Mini-Inquiries’ After Panama Leaks

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By Linda A. Thompson

Some European Union nations are scrambling to decipher and act on Panama Papers leaks that revealed 200,000 offshore entities held by wealthy individuals and businesses from across the globe.

Lawmakers from the Netherlands, Belgium and Austria outlined the experiences of panels launched by their governments following the massive leak of 10 million documents from the Panama law firm Mossack Fonseca & Co. during a Jan. 31 meeting jointly held by the European Parliament Committee on Economic and Monetary Affairs and Panama Papers investigative committee.

Belgium has set up a special committee without powers of inquiry to look into the revelations, said Ahmed Laaouej, chairman of the Belgian Special Committee on the Panama Papers. The Dutch government has organized a ‘mini-inquiry,’ an official said, and Austria has also set up a special committee on the leaks.

The European Parliament committee meeting—which invited judges, financial advisers and regulators—illustrates the problem of coordinating information obtained by the different authorities and services involved in anti-money laundering, as well as tax avoidance and evasion efforts, Belgium’s Laaouej said.

He added that European member countries still lack a harmonized list of tax havens. “We would like to have a homogeneous list of tax havens which could be used to fight against this particularly deleterious effect” of tax fraud and financial crimes, he said, noting that Belgium is calling for a European agency “against tax fraud and tax havens. Because this is occurring at the cross-border level, it’s not possible to deal with this at the national level.”

Austria: Protect Whistleblowers

Kai Jan Krainer, vice-chairman of the committee on Finance of the Austrian National Council, said the meetings of the Austrian special committee formed to look into the Panama Paper revelations illustrated the need for transparency in the form of a publicly accessible ultimate-beneficiary-ownership register.

The committee’s meetings, he said, also outline the need for a ban on letterbox companies—as their only interest in tax residency is tax fraud—as well as better legal protection for whistle-blowers from within the financial services industry.

Krainer also backed the calls for a common EU tax haven list. “Blacklists are good. It helped Austria. We were threatened to be put on a blacklist because of our banking secrecy and it helped us become a more civilized country” and incentivized the country to participate in efforts aimed at the exchange of tax and financial information.

Dutch Probe

The Dutch government, meanwhile, elected to organize a yet-to-be-held short ’mini-inquiry’, under which people who are called up will have to testify under oath, similar to a U.S. congressional hearing.

Ed Groot, chairman of this Dutch parliamentary committee into tax structures, said the five-member panel is expected to organize its meetings after Dutch general elections in March.

“It will focus on issues of private trusts and the role of the Netherlands in facilitating so-called letterbox companies,” he said. “The main goal is to obtain more insight into the way trust office and tax advisers operate, and how tax schemes are set up in practice,” he said.

To contact the reporter on this story: Linda A. Thompson in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

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