GUE/NGL in the Panama Papers’ Inquiry Committee

What are the Panama Papers?

In an international news publication coordinated by the International Consortium of Investigative Journalists (ICIJ), 11 million leaked documents from the law firm Mossack Fonseca in Panama revealed a global network of shell companies and hidden bank accounts used to facilitate tax evasion, human trafficking, bribery, arms deals, financial fraud, drug trafficking and. The leak showed that banks, legal and tax advisors and wealth managers had been involved in setting up secret offshore structures for their clients.

Following these revelations, the European Parliament set up a Committee of Inquiry to fight tax avoidance, tax evasion and money laundering (PANA).

The European Parliament’s Committee

It’s mandate of this Inquiry Committee , has as its objective the evaluation of how EU law in place has been breached or not administered properly and whether the EU laws due to be implemented in 2016 and 2017 were fit for purpose.

Eight GUE/NGL MEPs are members of the PANA Inquiry Committee: Fabio DE MASI (vice-president of the Committee), Matt CARTHY (GUE/NGL Co-coordinator in PANA), Patrick LE HYARIC (GUE/NGL C0-coordinator in PANA), Miguel URBAN CRESPO (GUE/NGL shadow rapporteur in the PANA Inquiry Committee), Miguel VIEGAS, Stelios KOULOGLOU, Marina ALBIOL GUZMAN, and Curzio MALTESE that was replaced by Takis HADJIGEORGIOU.

GUE/NGL’s objective in this committee is to examine and propose solutions to the structural problems of EU law that facilitate and promote illicit financial flows through tax havens.

The achievements of GUE/NGL in the course of the PANA Inquiry Committee

The achievements of GUE/NGL in the course of the PANA Inquiry Committee include:

  • GUE/NGL played an important role in building pressure within the Parliament to set up a Committee of Inquiry after the revelations of the Panama Papers
  • We have campaigned for transparency within the European institutions and won the support of other political groups to work together to oppose the obstacles imposed by the Council and Commission regarding access to documents by the European Parliament. The restrictions are sometimes so absurd that academics have more access to “secret” official documents than the Members of the European Parliament.
  • We have secured invitations of academics and experts to speak in the PANA hearings and missions, including Sol Picciotto, Prem Sikka, Richard Murphy, Ronen Palan and Joseph Stiglitz; and also of the former compliance officers of Berenberg Bank who lost their jobs for speaking out.
  • We proposed and secured the organisation of a PANA workshop with former chief counsel of the US Senate Permanent Subcommittee on Investigations Elise Bean on the work of inquiry committees, revealing the need for further inquiry powers to be obtained by the European Parliament; which prompted a discussion among MEPs on the format of the European Parliament’s Inquiry Committees.
  • We proposed and won support for a mission of the PANA Inquiry Committee to the US, exposing its role as a tax haven due to the concentration of tax havens among its states.
  • We proposed and secured an invitation to Commission President Jean-Claude Juncker to attend a PANA hearing to address, among other issues, inaccurate statements he has previously made regarding his role in the Luxleaks scandal.

GUE/NGL initiatives

GUE/NGL has worked on several initiatives.

  •  We created a blog to follow the work of GUE/NGL MEPs on the PANA committee for the duration of the mandate; creating awareness both on the revelations of the Panama Papers and the discussions being held at the European Parliament about it.
  • Our team organised a major event in Brussels on April 26 and 27, 2017, which featured politicians from around the world involved in the fight against illicit financial flows, trade unionists, academics, NGOs and representatives from European left parties. It facilitated an exchange of views from different organisations, parties and countries on the experience of developing policy, and campaigning and mobilising for tax justice, and developed a strategy and network to strengthen this movement.
  • We commissioned a series of studies by GUE/NGL from several academics on the role of the Big 4 accounting and auditing firms in tax havens, and on the impact of the European Commission’s recent re-launched proposal for a Unitary Taxation System at the European level.

Policy work in the European Parliament

The PANA Inquiry Committee takes place at the same time as work on other relevant directives and regulations concerning anti-tax avoidance and anti-money laundering is proceeding in the European Parliament.

In relation to some of these, GUE/NGL has also made several achievements, particularly in the Economic and Monetary Affairs (ECON) Committee:

  • GUE/NGL PANA MEPs proposed and won support for several crucial amendments to significantly improve the Parliament’s text on the revision of the 4th anti-money laundering directive (AMLD), including:
    • Fully public registers for all trusts and companies; and the broadening of bank account registers to include land and real estate as well as financial assets
    • A strict prohibition on using managers or others as substitutes for beneficial owners in the register; and a requirement for obliged entities (e.g. banks) to terminate business relationships with entities that fail to provide beneficial ownership information
    • Providers of tax advice as well as art traders, auction houses and freeports have been added to the list of obliged entities
    • Sanctions, including withdrawal of business licence for obliged entities breaching the anti-money laundering regulations
    • Tax offences are to be considered predicate offences for money laundering in all circumstances, independently of how heavily they are punished at the member state level
  • We also secured the support of other political groups to reject the EU Commission’s delegated act on the “black list” for third countries with high risk of money laundering , as the list did not contain many jurisdictions (such as Panama) that protect illicit financial flows.

If you want to download the PDF with this information, please click here: Panama open days