"Panama papers": European Parliament to set up a committee of inquiry

Translated from Le Monde, Cécile Ducourtieux, 04/14/2015 @ 11:35am

The European Parliament could be validating, on April 14th, the creation of an inquiry committee on the "Panama Papers". The decision should be made during the weekly meeting of group leaders in the House. The Greens, ahead of all subjects related to fighting tax fraud and evasion, are in favor of the proposition, along with social democrats, liberals and the far-left.

"It’s hard to say ‘no’, from a political standpoint, considering the global-scale of the ‘Panama Papers’ scandal", a source from EPP (European Popular Party) admits. If it is indeed created, the committee, lasting for a year (and renewable for 6 months), would be granted significant means (budget, administrative personnel). It would also grant the power to request hearings, documents, and lead on-site investigations, etc.

This would be the second inquiry committee since the hemicycle reconvened in mid-2014, after the so-called "Dieselgate" committee. This committee was set up early this year, after fraud regarding pollutant emissions from German car manufacturer Volkswagen were revealed.

The "Panama committee" would also take over — although their mission is slightly different and they had less power overall — of two special committees called TAXE. TAXE 1 and TAXE 2, launched after the LuxLeaks revelation of November 2014, had to do with a tax evasion system benefiting multinationals in Luxembourg.

TAXE 1 resulted in a report, in late 2015, urging the European Committee to strengthen its measures against tax evasion and fraud. TAXE 2, in its wake, tried to shed light on the actual responsibilities of European states, many of them (Belgium, Luxembourg, Netherlands, Ireland) have made offering advantageous tax conditions to big companies their specialty.

In coming days, the battle in Parliament will mostly revolve around the actual mandate for this up-and-coming committee of inquiry. Elected officials may only raise questions regarding violation of European laws by European Member States or European institutions.

The EPP and the Greens have both already drafted a version of the mandate — each slightly different from one another. Both groups insist on the necessity of checking whether European Member States have thoroughly applied the 2005 anti-money laundering directive.

Pressuring States

Furthermore, the Greens want to ensure that European administration bodies have sufficiently cooperated in order to possibly warn one another in case of suspected or proven tax evasion (in accordance with a 2011 directive on administrative cooperation in taxation).

The European Commission, though reluctant during the creation of TAXE, now seems in favor of the "Panama committee". This maintains a real pressure on Member States, as it’s been deploying in the last 18 months an ambitious agenda to fight fiscal abuse.

On Tuesday, April 12th, in response to the "Panama Papers", the Commission went further than the initial project commanded, by requiring transparency of European countries, one by one, on the matter of companies' profits and taxes by including tax havens. Alain Lamassoure, leader of the Republican Party in Strasbourg and president of both TAXE commissions, "welcomes the Panama revelations, which will help fight against tax fraud". He says he fully supports the idea of an inquiry committee, but he’d prefer to see a permanent committee set up at Parliament, "because these matters of transparency and revelations will keep us busy for years."