EU countries fail to fight money laundering and tax evasion – Committee

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EU countries fail to fight money laundering and tax evasion - CommitteeThe European Parliament committee of inquiry into the “Panama Papers” leaks has concluded that, “some EU member states are obstructing the fight against money laundering, tax avoidance and evasion.”

On Wednesday, the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) approved its final report by 47 votes to 2 with 6 abstentions, following an 18-month probe into breaches of EU law in relation to money laundering, tax avoidance and evasion.

The inquiry recommendations were also approved by the committee, with 29 votes for to 2 votes against, with 18 abstentions.

A minute’s silence opened the meeting, as a tribute to investigative journalist Daphne Caruana Galizia, who was killed in a car bomb explosion on Monday.

Mrs Caruana Galizia gave the committee evidence about her work on the Panama Papers at a meeting in February 2017 in Malta.

There was overwhelming support for an oral amendment brought forward by David Casa condemning the “assassination” of the journalist. The text described Mrs Caruana Galizia as being “on the frontline of the battle against money laundering.”

The family of Mrs Caruana Galizia has been invited by EP President Antonio Tajani to Parliament’s plenary session next week in Strasbourg to join MEPs in paying their respects.

The committee of MEPs expressed regret that “several EU member states featured in the Panama Papers.”

They pointed to the “lack of political will among some member states to advance on reforms and enforcement.” This, they suggested, “had allowed fraud and tax evasion to continue.”

There was sharp criticism by the committee of the secrecy surrounding the work of the Council’s Code of Conduct Group and highlighted how moves to counter tax evasion are often “blocked by individual member states.”

It wants the Commission to use its authority to change the unanimity requirement on tax matters.

A call for a common international definition of what constitutes an Offshore Financial Centre (OFC), tax haven, secrecy haven, non cooperative tax jurisdiction and high-risk country, was backed by the committee.

The committee gave overwhelming backing to a call for the Council to establish by the end of this year a list of EU member states with “where Non-cooperative Tax Jurisdictions exist.” It also supported a proposal that any entity with an offshore structure should have to justify to authorities their need for such an account.

“Regularly updated, standardised, interconnected and publicly accessible beneficial ownership (BO) registers, ” was also needed the committee said.

Proposals were called for to close loopholes which allow for aggressive tax planning as well as more dissuasive sanctions at both EU and national level against banks and intermediaries “that are knowingly, wilfully and systematically involved in illegal tax or money laundering schemes.”

The Inquiry Committee being set up was triggered by the leak of personal financial information, collectively known as the Panama Papers, which revealed that some offshore business entities had been used for illegal purposes, including fraud and tax evasion.

The Inquiry Committee’s final report and recommendations will be put to a final vote by the full Parliament as a whole in Strasbourg in December.

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