The resolution adopted by the European Parliament calls on the authorities of the Member States to launch a thorough investigation on their territory into any irregularities uncovered and to carry out an audit of all the personalities mentioned in the Pandora Papers. MEPs are calling on the European Commission to assess the revelations and consider whether new legislation is needed. The Commission is also required to determine whether legal action against certain Member States is justified. According to MEPs, the EUROPEAN PUBLIC PROSECUTOR’s Office should also assess whether specialized investigations are needed based on the revelations.
MEPs regret that former and current EU politicians are named in the Pandora Papers. They are Andrej Babiš, Prime Minister of the Czech Republic, Nicos Anastasiades, President of South Cyprus, Wopke Hoekstra, Minister of Finance of the Netherlands, Tony Blair, former Prime Minister of the United Kingdom, and John Dalli, former Maltese Minister and European Commissioner. Ilham Aliyev, Azerbaijani President, and Milo Đukanović, President of Montenegro, are also directly criticized in the resolution.
In a resolution adopted by 578 votes in favor, 28 against and 79 abstentions, MEPs identified the measures they believe should be taken urgently by the EU in order to eliminate the legal loopholes that currently facilitate widespread tax avoidance, tax evasion, and money laundering. They also asked the European Commission to take legal action against the Member States that do not apply the existing legislation correctly. MEPs particularly criticized former and current prime ministers and ministers of EU member states, whose activities were revealed by the Pandora Papers.
The resolution reflects the feeling of indignation expressed by MEPs at the October plenary session, in a debate held two days after the publication of the first findings of the Pandora Papers.
Parliament calls on the Member States and the European Commission to do more in terms of exchanging information and identifying the beneficial owners, that is, those who ultimately benefit and hide behind shell companies. MEPs also point out that many Member States have been slow to implement the current rules aimed at combating tax avoidance and money laundering. The European Commission must bring the Member States that are lagging behind to order. The Commission is also invited to put forward proposals to regulate the “golden passport” and citizenship or residence permit schemes, as well as to assess whether the process of identifying politically exposed persons and implementing enhanced due diligence measures is effective.
According to the resolution, there is no point in introducing new and stricter rules if the existing ones are not properly applied. Better cooperation is also needed between Member States’ authorities across the EU. The resolution also calls for goodwill to be shown in such matters and for more resources to be allocated to this policy area. The European Commission should itself assess whether the “financial intelligence units” of the Member States have sufficient resources.
According to the resolution, the European blacklist of tax havens does not serve its role, as it does not include some of the countries in which the most infringements are committed. The resolution notes that, for example, two-thirds of the shell companies mentioned in the Pandora Papers are based in the British Virgin Islands, but this country is not on the European blacklist. MEPs suggest several ways to improve the process of blacklisting countries, such as broadening the list of practices considered to be hallmarks of tax havens and reforming the related decision-making process. Earlier in October, this year MEPs had already adopted a more detailed resolution on the issue.
