TALLINN - According to the European Parliament, the European Union tax haven blacklist is not fit for its purpose, and MEPs are calling for investigations, clampdowns and new laws concerning the so-called Pandora Papers.
Parliament on Thursday called for thorough investigations to be launched into any wrongdoing exposed by the Pandora Papers that took place in EU jurisdictions. Adopting a resolution by 578 votes in favor, 28 against and 79 abstentions, MEPs identified what they see as the most urgent measures the EU needs to take to close loopholes that currently allow for tax avoidance, money laundering and tax evasion on a massive scale. They also called for legal action to be taken by the Commission against EU countries that do not properly execute existing laws. MEPs reserved particular criticism for present and former prime ministers and ministers of EU member states whose activities were revealed by the Pandora Papers.
The resolution adopted on Thursday urges national EU authorities to launch thorough investigations of any wrongdoing revealed in the Pandora Papers involving their jurisdictions, including audits on all individuals mentioned. The Commission is asked by MEPs to review the revelations to analyze whether further legislation should be proposed and establish if legal action against some member states is warranted. According to MEPs, the European Public Prosecutor's Office should also assess whether the revelations merit any specific investigations.
MEPs reserve specific condemnation for EU and former EU politicians including Czech Prime Minister Andrej Babis, President of Cyprus Nicos Anastasiades, Dutch Finance Minister Wopke Hoekstra, former British Prime Minister Tony Blair and former Maltese Minister and EU Commissioner John Dalli -- all of whom were mentioned in the Pandora Papers. Ilham Aliyev, the president of Azerbaijan, and Milo Dukanovic, the president of Montenegro, are also criticized directly in the resolution.
Parliament urges member states and the Commission to do more regarding the identification and sharing of information on beneficial owners, those persons ultimately profiting from a shell company structure. MEPs also point out that numerous member states are delayed in their implementation of existing rules intended to counteract money laundering and tax avoidance. These laggards should be pursued by the Commission. The Commission is also asked to issue proposals regulating golden citizenship and residency schemes and to assess the effectiveness of the identification of politically exposed persons and the application of enhanced due diligence.
New, stronger rules will be pointless without making what is already in place work properly and without better cooperation between national authorities across the EU, the resolution says, calling for more resources and good will to be applied to this policy area. The Commission itself should assess whether national financial intelligence units are sufficiently well-resourced.
The resolution calls the current EU blacklist of tax havens a "blunt instrument", unable to catch some of the worst-offending countries. For example, the British Virgin Islands accounts for two thirds of the shell companies in the Pandora Papers and yet do not feature on the EU blacklist, the resolution remarks. MEPs propose numerous ways to improve this listing process, including widening the scope of practices that are considered typical markers of a tax haven and reforming the process of deciding which jurisdictions are included. Earlier in October 2021, MEPs adopted a more detailed resolution on this particular issue.