Pandora Papers: MEPs call for investigations, clampdowns and new laws

This article is brought to you in association with the European Parliament.

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 favour, 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 follows on from the indignation expressed by MEPs at an October plenary debate held two days after the publication of the first findings of the Pandora Papers.

No stone unturned

The resolution adopted today 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 analyse whether further legislation should be proposed and establish if legal action against some member states is warranted. According to MEPs, the European Public Prosecutor should also assess whether the revelations merit any specific investigations.

MEPs reserve specific condemnation for EU and former EU politicians Andrej Babiš, Czechia’s Prime Minister, Nicos Anastasiades, President of Cyprus, Wopke Hoekstra, Dutch Minister of Finance, Tony Blair, former British Prime Minister, and John Dalli, former Maltese Minister and EU Commissioner – all of whom were mentioned in the Pandora papers. Ilham Aliyev, the President of Azerbaijan, and Milo Đukanović, the President of Montenegro, are also criticised directly in the resolution.

More on beneficial owners and implementation of agreed rules

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.

EU tax haven blacklist – a “blunt instrument”

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.