There were many reactions, on Monday 4 October, to the new revelations of the Pandora Papers investigation into tax evasion by thousands of individuals, including many political leaders such as Czech Prime Minister Andrej Babiš.
For the European Commissioner for Economy, Paolo Gentiloni, the Pandora Papers, like previous tax scandals, will increase the pressure for political action. The Commission will unveil a legislative proposal by the end of 2021 that will directly target shell companies, “one of the problems highlighted” in the latest revelations, he added on his arrival in Luxembourg for the Eurogroup meeting.
In Brussels, the EU institution defended the robustness of EU standards on tax transparency. “In the last five years, there has been significant progress: we have started to share information on foreign financial accounts by ending banking secrecy, and to automatically exchange information on international tax planning”, said Daniel Ferrie, spokesman at the Commission.
The institution did not say whether it would hold the resigning former EU commissioner, John Dalli, who has been targeted by the revelations, to account.
On Tuesday, 5 October, the Ecofin Council is expected to amend the EU ‘black’ list of tax havens, removing Anguilla, Dominica and the Seychelles (see EUROPE 12800/15). Not included in this list are countries or jurisdictions that have been singled out by the Pandora Papers revelations.
“This list has an impact on the ground” especially because “130 harmful schemes have been removed”, said Mr Ferrie.
Led by the International Consortium of Investigative Journalists (ICIJ), the Pandora Papers investigation has uncovered more than 29,000 offshore companies. Amongst those targeted is Andrej Babiš, who used front companies to finance the purchase of a castle in the South of France. The Czech Prime Minister denounced an attempt to destabilise him just a few days before the country holds parliamentary elections.
In the European Parliament, MEPs scheduled an urgent debate on this new scandal which is to be held on Wednesday afternoon, 6 October.
The Chair of the Subcommittee on Tax Matters (FISC), Paul Tang (S&D, Netherlands), said that the criteria for the European ‘blacklist’ were “completely inadequate”, as the ICIJ investigation had highlighted the role of EU countries and US states. “Serious reforms are needed, starting tomorrow, when EU finance ministers discuss the list”, he said via Twitter, scolding Dutch Finance Minister Wopke Hoekstra for investments in the British Virgin Islands.
For Markus Ferber (EPP, Germany), the Pandora Papers show that “we need to reset the EU blacklist and make sure that it contains all the usual suspects” and that it results in dissuasive “sanctions”. Daniel Freund (Greens/EFA, Germany) once again urged the EU27 to exclude Mr Babiš, who is already involved in a conflict of interest over the use of EU financial aid in the Czech Republic, from European Council discussions on the EU budget. (Original version in French by Mathieu Bion)