Naomi Fowler ■ Panama Papers Committee investigates in London UK, home to 2,000 ‘enablers’
UPDATE: 15 February 2017, London – Bloomberg has reported that the chairman of the EU’s Panama Papers inquiry has criticised the UK Treasury for refusing to meet with its investigatory team during the recent fact-finding visit to London. Read more here.
Last year the Panama Papers scandal shook the world and lifted the lid on murky offshore dealings in spectacular fashion. The political consequences and investigations, criminal and otherwise are far from over. The European Parliament set up the Panama Papers inquiry committee tasked with investigating “alleged contraventions and maladministration in the application by the EU Commission or member states of EU laws on money laundering, tax avoidance and tax evasion.” Today Bloomberg reports that the committee begins a series of ‘secret fact-finding meetings’ in London for two days. It has come to the heart of the beast.
We have always said that the Panama Papers could just as well have been branded the ‘British Virgin Islands Papers’, since that British Overseas territory was revealed as a Mossack Fonseca favourite, whose most important secrecy offering comes from it’s “lax, flexible, ask-no-questions, see-no-evil company incorporation regime.”
The UK has a special responsibility to take a global lead on tackling financial secrecy. The United Kingdom runs a global network of Overseas Territories and Crown Dependencies that includes some of the world’s biggest tax havens — including the Caymans, the British Virgin Islands, Bermuda and Jersey. If all of the UK’s satellite jurisdictions were rolled into one, the UK would be number one in the Tax Justice Network’s Financial Secrecy Index.
Since the Panama Papers scandal hit in April 2016 there has finally been a push to force these jurisdictions, as the UK has every right to do, to create public registers of beneficial owners of companies through the Criminal Finances Bill, currently going through the British Parliament.
The EU’s Panama Papers Inquiry Committee’s current visit to London is covered here by Bloomberg’s Ben Stupples. He reports that:
“the leak identified nearly 2,000 U.K.-based intermediaries—such as accountants, lawyers and tax advisers—who helped facilitate individuals or entities with tax evasion or avoidance”
That’s the first time we’ve seen that specific number. It doesn’t mean that all those on that list have broken any laws, such is the problem with the law as it stands, but use of Mossack Fonseca supplied offshore structures on such an industrial scale raises a lot of questions.
We don’t know where this EU inquiry might lead but among the questions to consider is how realistic the prospects of effective investigation and enforcement are, and whether the British government has the political will to take action.
What governments do and don’t do to deal with the offshore industry strikes at the heart of whether the exercise of power is in the interests of the many, or the few. As the Tax Justice Network’s John Christensen says today,
“this is about the ability to protect elites from democratic rules and accountability. This is what offshore provides to elites and the banks who serve them.”
Among those with whom the commmittee will meet over the next couple of days is the U.K.’s special task force on the Panama Papers from the UK tax authorities, officials from HSBC, the Law Society of England and Wales, and the Institute of Chartered Accountants of England and Wales.
We’ll await the results with great interest.
In the meantime, read what we said last year when the Panama Papers story first broke: The #PanamaPapers: Five things the world can do about it
The capture of Malta and the fight for justice: the Tax Justice Network podcast, July 2021
We want your feedback on our Financial Secrecy Index
New free book: Combating Fiscal Fraud and Empowering Regulators
Buffet of tax-evading secrecy revealed by US settlement with Swiss bank Rahn+Bodmer
Capital flight from Africa: Resource Plunder and the Poisoned Paradises in Tax Havens
Beneficial ownership verification: exploring Belgium’s sophisticated system
Some things never change: the use of Swiss banks by crooks
New study and tool for assessing risks of illicit financial flows in Latin America
Vulnerability and exposure to illicit financial flows risk in Latin America
28 January 2021