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European Parliament to form special committee to examine Paradise Papers

A new special committee is to be set up by the European Parliament to examine the ‘Paradise Papers’ revelations. Comprised of 45 MEPs, its mandate will last for 12 months and it will investigate financial crimes, tax evasion and tax avoidance – continuing the work carried out by the previous TAXE and TAXE 2 special committees and the Panama Papers inquiry committee.

The European United Left (GUE/NGL) group has welcomed the decision of the European Parliament to form a new special committee to examine the Paradise Papers revelations.

Irish MEP Matt Carthy, who negotiated on behalf of GUE/NGL on the committee’s mandate, said the new special committee would provide MEPs with the opportunity to continue their work examining financial crime, corporate tax avoidance and tax evasion within the EU and internationally. The draft mandate was agreed by political groups in Strasbourg on Thursday 08 February in a meeting of the Parliament’s Conference of Presidents.

“GUE/NGL has been calling for a new special committee to examine the revelations in the Paradise Papers from offshore law firm Appleby since the leak, so this is a very welcome move by the European Parliament. Establishing a new special committee will allow MEPs to continue our work examining the nature of, and solutions to, tax avoidance, tax evasion and money-laundering in the EU and around the world,” Mr Carthy said.

“As well as continuing the work we carried out in the Panama Papers inquiry committee, which came to an end in December – and the previous special committees examining the LuxLeaks revelations – we will also be focusing on new emerging issues including tax avoidance and evasion in the digital economy.

“Our proposals for examining the impact of tax avoidance by EU companies on developing countries, the use of VAT fraud revealed in the Paradise Papers – particularly in the Isle of Man – and the role of the United Nations as an important international actor in tackling these issues were all agreed.

“The committee intends to put particular emphasis on examining the British Overseas Territories and Crown Dependencies as notorious hubs for financial crime, secrecy and tax-dodging.”

Carthy also commented on the specific relevance of the Paradise Papers to Ireland, saying: “There are many Irish connections to the Paradise Papers, including revelations regarding the Irish government’s facilitation of ongoing massive tax avoidance by Apple, as well as regarding AIB, media magnate Denis O’Brien, Bono and others, which I will be urging the committee to examine.

“During negotiations we were successful in securing agreement from across the political spectrum that the new committee will also examine the consequences of bilateral tax treaties concluded by Member States. This is especially relevant given the Irish government’s failure to end the use by multinationals of the so-called ‘Single Malt’ tax avoidance strategy, a replacement of the Double Irish, which is facilitated by some of our double taxation treaties.”

The committee also aims to examine the European Commission’s secretive process of screening and selection of jurisdictions for its tax haven blacklist and list of high-risk third countries for anti-money laundering purposes.

A proposal by GUE/NGL to include specific reference to the role and protection of whistleblowers and journalists in the committee’s mandate was supported by the Greens and the Liberals but rejected by the largest groups the EPP (Christian Democrats) and S&D (social democrats). However, in following up on the TAXE, Tax2 and PANA reports and recommendations, there should be sufficient scope to continue work on the issue of protection of whistleblowers and journalists.

The draft mandate of the new special committee agreed by political groups at a meeting of the Conference of Presidents on Thursday 8 February can be read here: Draft_TAXE_3_mandate.

The exact name of the new special committee has not been decided.

The draft mandate will be adopted by MEPs at the next plenary session in Brussels on February 28. The composition of the new special committee will then be voted on by MEPs at the plenary session in Strasbourg from March 16-19, and the constitutive session of the committee will also be held immediately after this vote.