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EU lawmakers doubt that an EU black list, on which the Commission is working, will be a game changer to tackle tax dodging. Bank activities should be better controlled, as should the role played by EU member states, such as the UK, Germany and Luxembourg.
Members of the European Parliament (MEPs), Frank Engel (centre-right) and Fabio De Masi (United Left), are not fully convinced that an EU black list on tax havens, such as the one proposed by the Commissioner on Economic Affairs Pierre Moscovici, will be able to offer ambitious answers to the Panama Papers scandal.
“There were black lists in the past and at some point they were abandoned because everybody had made it off the black list,” according to Engel.
Both Engel and De Masi explained that tax evasion was a worldwide problem, much more complex than simply censuring specific countries like Panama.
“I do think Panama is a tax haven, but it would be unfair to focus only on Panama,” De Masi explained. “If we took the matter seriously, we would also need to put many European Union countries there,” he added.
Banks’ role in tax evasion
The Panama Papers showed that French, British, German and Luxembourgish banks are particularly active in legally organising money transfers to tax havens for well-off customers.
But the main issue might be linked to bank legislation, which focuses mainly on tackling money laundering, while tax evasion appears of “secondary interest”, according to Engel.
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“If the money was somehow subtracted from tax authorities somewhere, it is something that neither my bank nor your bank nor any other bank are sufficiently interested in,” Engel said.
“And that is the problem we will have to confront, but right now banking legislation, it is what it is.”
De Masi also referred to Germany, which he thinks still has an issue regarding tax evasion. “Not only Luxembourg has failed,” he said, explaining that a foreign citizen can open a bank account in Germany “without much burden of proof for the banks”.
He asked for strong sanctions against banks which deliberately help their customers to organise tax evasion.
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“If a German bank helps somebody, works with money which has been evaded in some other jurisdiction, they are not punished very much,” he said.
“We really need tough laws in this regard. I would also argue if a bank such as Deutsche Bank repeatedly helps to evade taxes and does criminal activities, there has to be a withdrawal of their banking license.”
Controversial trade secret
There is much more disagreement when talking about the so-called “trade secrets directive”, aimed at harmonizing national laws to protect businesses from unfair competition, and which is likely to be approved at the European Parliament’s plenary session on April 13.
Critics have raised concerns, arguing that this directive puts at risk the work of whistleblowers and which, in consequence, would make it more difficult to publicise scandals of public interest such as the Panama Papers or Luxleaks.
De Masi claimed that “this directive would leave whistleblowers unprotected” and asked for a new rule to ensure their protection. According to the MEP, the basic problem is that the definition of trade secrets is too wide.
“But the Panama Papers result from hacking, and hacking is illegal,” said Engel, adding that he would “never accept to protect people who break the law”.
- Author: Ahinara Bascuñana López, Euranet Plus News Agency
Listen to the whole debate below (or watch it above)
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