The EU Parliament Committee of inquiry into the Panama Papers leaks expressed that some member states of the EU are obstructing the fight against money laundering, tax avoidance, and evasion.The Committee of Inquiry into Money Laundering, Tax Avoidance, and Tax Evasion (PANA) approved its final report.

There has been regret expressed on behalf of MEPs that several EU member states featured in the panama papers something which is quite disappointing.  Some of the reasons have been the lack of political will and determination among some member states to advance on reforms and enforcement, which in turn  allowed fraud and tax evasion to continue.

EU Parliament Committee proposals for Panama Papers: Comments

The Committee had criticized the secrecy around the work of the Council’s Code of Conduct Group.  Moreover it was highlighted that individual Member States were responsible for preventing the fight against money laundering and tax evasion. The aim in this respect is for the Commission to use its authority to change the unanimity requirement on advancing tax matters.

It was also requested by the Committee for a common international definition of what constitutes an Offshore Financial Center (OFC), tax haven, secrecy haven, non-cooperative tax jurisdiction, and high-risk country. It was further recommended that an arrangement whereby an entity with an offshore structure must be justified to the relevant authorities. It was again pointed the necessity to keep updated, complete and interconnected fully and publicly accessible registers for beneficial ownership.

It also further discussed that there is a need to tackle aggressive tax planning as well as more dissuasive sanctions need to be established and be implemented at both EU and national level against banks and intermediaries that are knowingly, willfully and systematically involved in illegal tax or money laundering schemes. It was stressed that urgent reforms are required, not least within the Council Code of Conduct Group on business taxation.

There was criticism against member states which as stated they failed to properly and effectively implement EU legislation against money laundering and exchange of tax information. The conclusion there was that if this was done properly, then the practices revealed by the Panama Papers would have been prevented.

The Inquiry Committee

Inquiry Committee was set up due to 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 report will be put to a final vote by the full Parliament as a whole in by the end of the year.