EU Panama Papers Investigators to Hold Secret London Talks

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By Ben Stupples

The European Parliament’s Panama Papers inquiry committee will hold secret fact-finding meetings in London over the next two days to identify global strategies against tax evasion.

During a two-day trip to England’s capital, the European Parliament’s Panama Papers committee will meet U.K. accounting and legal professionals, academics, non-governmental organizations, and representatives from HSBC Holdings Plc, according to a confidential plan of the committee’s trip, seen by Bloomberg BNA.

The U.K. is “very relevant” on the topic of tax evasion due to the number of intermediaries linked to it through the Panama Papers, Fabio De Masi, a German member of European parliament and the vice chair of the Panama Papers committee, told Bloomberg BNA in a Feb. 8 telephone interview.

The committee’s overall objective is “to see where there have been obstructions among member states to close the gaps and loopholes in our legislation and to see whether they engaged in what we call constructive non-compliance,” when “there’s law on paper, but it’s not implemented,” he said.

Panama Papers

Through the leak of more than 11 million documents from Panamanian law firm Mossack Fonseca & Co., the Panama Papers exposed wealthy individuals who created offshore entities to avoid taxes.

Prompting the U.K. to set up its own investigative team, the leak identified nearly 2,000 U.K.-based intermediaries—such as accountants, lawyers and tax advisers—who helped facilitate individuals or entities with tax evasion or avoidance, and nearly half of companies listed were registered in the overseas U.K. territory of the British Virgin Islands.

“We’re in all sorts of problems with offshore secrecy,” said a person with knowledge of the Panama Papers inquiry committee’s visit to the U.K., who asked not to be identified as the talks are private. “Accountants and lawyers, and big corporations, are right at the heart of it.”

Set up two months after the release of the Panama Papers, the European Parliament’s inquiry committee—known as the PANA committee—aims to investigate the misuse of European Union laws among the bloc’s member states through money laundering, tax avoidance and tax evasion. The committee will deliver a report on its work within the next year.

Plan of Action

OnFeb. 9, the committee will meet Meg Hillier, chair of the U.K.’s parliamentary watchdog for the British government’s spending, academics and non-governmental organizations, including Oxfam and Transparency International U.K., according to the trip’s draft plan.

The following day, it will first meet with the U.K.’s special task force on the Panama Papers from Her Majesty’s Revenue and Customs, which announced in November 2016 it was investigating more than 30 companies or individuals with the National Crime Agency in relation to the data leak.

It will also meet with officials from HSBC, Britain’s largest bank by market capitalization, the Law Society of England and Wales, and the Institute of Chartered Accountants of England and Wales.

“They’re going to be discussing legislation and analysis: what can be done, and what has been done,” the person with knowledge of the committee’s trip said about the issues its members will explore.

Fact Finding

In a Feb. 8 e-mailed statement, a Law Society spokesman said the organization’s tax law, company law, and anti-money laundering committees will give evidence to help the PANA committee’s “fact-finding mission to the U.K.”

An HSBC spokeswoman confirmed the bank’s meeting to Bloomberg BNA in a Feb. 8 telephone call and declined to comment further.

A spokesman HMRC said the tax authority “welcomes” the chance to share what it has learned from the Panama Papers data leak, with the European Parliament’s committee.

“The U.K. is leading the world on the acquisition and analysis of credible material that has enabled us to uncover and take swift action on evidence of wrongdoing, regardless of how deeply-hidden the arrangements are,” HMRC said in a Feb. 8 e-mailed statement.

“There are no safe havens for tax evaders and no-one should be in any doubt that the days of hiding money offshore with impunity are gone,” the spokesman added.

Under the trip’s current plans, a European Parliament spokeswoman told Bloomberg BNA in a Feb. 8 telephone call that there will be no press briefing or press release after the PANA committee’s visit.

Spokespeople for Meg Hillier’s Public Accounts Committee and the Institute of Chartered Accountants of England and Wales didn’t respond Feb. 8 to requests for comment.

To contact the reporter on this story: Ben Stupples in London at bstupples@bna.com

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

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