The European Parliament has opened an inquiry into the Panama Papers scandal, the unprecedented leak of 11.5 million documents concerning secretive offshore tax regimes.
The inquiry’s first evidence session in Brussels heard from some of the journalists involved in breaking the story in April of the Mossack Fonseca data leak.
A network of 107 international media outlets in 76 countries were involved in analysing the data which showed how some offshore companies were being used as fronts to avoid paying tax and to hide money as well as to use for bribes.
At the time, Mossack Fonseca was the world’s fourth largest offshore law firm. From its base in Panama, it incorporated companies in offshore jurisdictions, including the British Virgin Islands.
In fact, nearly half of the 214,000 companies, trusts and foundations in the leak were registered in British-administered tax havens, as well as in the UK itself.
An initial list of witnesses is likely to be agreed on 12 October. The panel does not have the power to force witnesses to attend, although it is unusual for those formally invited to refuse.
There were a number of calls for the role of British overseas territories to be examined by the inquiry.
In a statement released after the hearing, the German MEP Michael Theurer said he would be calling on British government representatives to give evidence.
“I recommend that we have a look at the influence of Great Britain on the former colonies and crown dependencies and the role that for instance the Cayman Islands, the British Virgin Islands, the Channel Islands, the Isle of Man or Gibraltar are playing,” he said.
Various political groups involved in the inquiry have thrown a number of names into the ring to be considered for the witness list. Among them is David Cameron whose father had investments in a fund in the Bahamas which avoided UK corporate tax.
George Osborne and his successor as chancellor, Philip Hammond, are also on lists being compiled. A Green MEP, Molly Scott Cato, said she would propose calling UK home secretary Amber Rudd as a witness. A fresh leak this month showed that Rudd had been a director of two offshore companies before she became an MP.
Over the coming months, MEPs will investigate whether national governments and the European Commission properly implemented EU anti-tax avoidance and financial transparency rules.
The inquiry is scheduled to last for ten months.
The original recipient of the leaked documents called for equal treatment and an end to the “secret parallel world in which the super rich and powerful can avoid tax and any other laws that seem inconvenient”.
“The rules on which we have all agreed have to apply to everybody, to the super rich 1% as well as for the rest, the 99%, otherwise our democracy is at stake,” Suddeutsche Zeitung’s investigative reporter Bastian Obermayer said in a videolink address to parliament.
Comments
They're not declaring minimal profits in Luxembourd Peter. By rigging transfer prices multinationals are MAXimising profits in Luxembourg where they pay bugger all tax. They minimise profits in places like the UK which have relatively balanced tax regimes, so avoiding paying their fair ahare..
The so-called level playing field is on a bit of a tilt Mr Juncker. Just like your freedom of movement now that all the big players have dropped Schengen.
No wonder the sensible Brits voted for Brexit.We need to get out before the EU implodes.
But how can any such enquiry go forward with Juncker at the helm? His record in allowing global enterprises to avoid tax by declaring minimal profits in tiny Luxembourg is shabby, and risks the old saw of the pot calling the kettle black.