{"id":103071,"date":"2017-12-11T12:00:53","date_gmt":"2017-12-11T12:00:53","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=103071"},"modified":"2017-12-05T15:05:01","modified_gmt":"2017-12-05T15:05:01","slug":"europe-responds-if-the-law-allows-this-we-need-to-change-the-law","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2017\/12\/europe-responds-if-the-law-allows-this-we-need-to-change-the-law\/","title":{"rendered":"Europe Responds: \u2018If the law allows this, we need to change the law.\u2019"},"content":{"rendered":"<div id=\"attachment_103072\" style=\"width: 510px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/KristofSimonJan-EP-620w-EU-paradise-papers.jpg\" ><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-103072\" class=\"wp-image-103072\" src=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/KristofSimonJan-EP-620w-EU-paradise-papers.jpg\" alt=\"\" width=\"500\" height=\"282\" srcset=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/KristofSimonJan-EP-620w-EU-paradise-papers.jpg 620w, https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/KristofSimonJan-EP-620w-EU-paradise-papers-300x169.jpg 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><p id=\"caption-attachment-103072\" class=\"wp-caption-text\">ICIJ members Kristof Clerix (left) and Jan Strozyk (right) with ICIJ reporter Simon Bowers.<\/p><\/div>\n<p><em>28 Nov 2017 &#8211; <\/em>A European Parliament committee has grilled <a target=\"_blank\" href=\"https:\/\/www.icij.org\/paradisepapers\" >Paradise Papers<\/a> reporters as members grapple with how to claw back millions being lost to new, elaborate tax-reducing maneuvers.<\/p>\n<p>The European Committee on Money Laundering and Tax Evasion \u2013 commonly called the PANA Committee \u2013 held its last hearing on Tuesday [23 Nov] with a <a target=\"_blank\" href=\"http:\/\/web.ep.streamovations.be\/index.php\/event\/stream\/171128-1500-committee-pana\" >session on the Paradise Papers<\/a>.<\/p>\n<p>International Consortium of Investigative Journalists reporter <a target=\"_blank\" href=\"https:\/\/www.icij.org\/journalists\/simon-bowers\/\" >Simon Bowers<\/a> and ICIJ members <a target=\"_blank\" href=\"https:\/\/www.icij.org\/journalists\/kristof-clerix\/\" >Kristof Clerix<\/a> (Knack, Belgium) and <a target=\"_blank\" href=\"https:\/\/www.icij.org\/journalists\/jan-lukas-strozyk\/\" >Jan Strozyk<\/a> (NDR, Germany) shared some of what they uncovered while reporting on the 13.4 million leaked documents with the committee.<\/p>\n<p>Documents from the <a target=\"_blank\" href=\"https:\/\/www.icij.org\/investigations\/paradise-papers\/appleby-offshore-magic-circle-law-firm-record-of-compliance-failures-icij\/\" >offshore law firm Appleby<\/a> raised serious concerns about loopholes that allow taxes and regulations to be circumvented in Europe. Examples included <a target=\"_blank\" href=\"https:\/\/www.icij.org\/investigations\/paradise-papers\/offshore-gurus-help-rich-avoid-taxes-jets-yachts\/\" >jet owners<\/a> who use the Isle of Man to avoid paying the VAT consumption tax and online gambling businesses that used secrecy jurisdictions get around U.S. legislation that prohibited knowingly accepting payments for a bet or wager on the internet.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Last hearing of EP <a target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/PANA?src=hash&amp;ref_src=twsrc%5Etfw\" >#PANA<\/a> Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion. With <a target=\"_blank\" href=\"https:\/\/twitter.com\/ICIJorg?ref_src=twsrc%5Etfw\" >@ICIJorg<\/a> investigative journalists behind <a target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/PanamaPapers?src=hash&amp;ref_src=twsrc%5Etfw\" >#PanamaPapers<\/a> and <a target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/ParadisePapers?src=hash&amp;ref_src=twsrc%5Etfw\" >#ParadisePapers<\/a> and <a target=\"_blank\" href=\"https:\/\/twitter.com\/pierremoscovici?ref_src=twsrc%5Etfw\" >@pierremoscovici<\/a> <a target=\"_blank\" href=\"https:\/\/t.co\/vDUWVdx2Qa\" >pic.twitter.com\/vDUWVdx2Qa<\/a><\/p>\n<p>&mdash; Petr Je\u017eek (@JezekCZ) <a target=\"_blank\" href=\"https:\/\/twitter.com\/JezekCZ\/status\/935537007060713473?ref_src=twsrc%5Etfw\" >November 28, 2017<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><a target=\"_blank\" href=\"https:\/\/www.icij.org\/investigations\/paradise-papers\/apples-secret-offshore-island-hop-revealed-by-paradise-papers-leak-icij\/\" >Tech giant Apple<\/a> also came up in the hearing in connection with its use of an Irish tax structure to shift its earnings to a low-tax jurisdiction.<\/p>\n<p>\u201cEarly next year it is likely that Apple\u2019s offshore cash will have doubled since the 2014\/2015 restructuring,\u201d explained Simon Bowers.<\/p>\n<p>\u201cIf you are a massive company or a super wealthy individual you have access to a sort of \u2018Pick\u2019N\u2019Mix\u2019 of legal jurisdictions,\u201d he added.<\/p>\n<blockquote><p><strong><em>\u201cIt shows how much protection there is surrounding these financial transactions.\u201d<\/em><\/strong><br \/>\n<strong>&#8212; Mario Borghezio<\/strong><\/p><\/blockquote>\n<p>\u201cIn most examples, we were seeing that you can optimize your tax affairs or your regulatory affairs by selecting and building a structure using the preferred jurisdictions, and that\u2019s something that simply isn\u2019t available to ordinary businesses or individuals with normal levels of income.\u201d<\/p>\n<p>\u201cWe have serious allegations here, and it\u2019s not just about politicians but also economic circles,\u201d said committee member Mario Borghezio.<\/p>\n<p>\u201cIt shows how much protection there is surrounding these financial transactions.\u201d<\/p>\n<p>The role of intermediaries including major, multinational accounting and advisory firms was also highlighted during the session.<\/p>\n<p>\u201cAppleby is not the mastermind of these tax structures, it\u2019s the facilitator\u201d said Bowers. \u201cThey were offered really by the \u2018Big Four\u2019 companies.\u201d<\/p>\n<p>The \u2018Big Four\u2019 refers to the international accounting and consulting firms \u2013 PwC, KPMG, Deloitte and Ernst &amp; Young. All four appeared multiple times in the ICIJ\u2019s Paradise Papers, Panama Papers and LuxLeaks investigations.<\/p>\n<p>The PANA committee was set up in June 2016 following the Panama Papers revelations, an earlier project by ICIJ that dealt with many of the same issues. The committee has examined a series of revelations about the offshore industry, including the European Investigative Collaboration\u2019s Malta Files and\u00a0the Organized Crime and Corruption Reporting Project\u2019s Russian Laundromat project.<\/p>\n<p>It published its <a target=\"_blank\" href=\"http:\/\/www.europarl.europa.eu\/cmsdata\/131460\/2017-11-08%20PANA%20Final%20Report.pdf\" >final report<\/a> in November, recommending a <a target=\"_blank\" href=\"http:\/\/www.europarl.europa.eu\/cmsdata\/131522\/2017-11-08%20PANA%20Draft%20Recommendation.pdf\" >permanent committee<\/a>, similar to the Senate Permanent Subcommittee on Investigations in the United States.<\/p>\n<p>\u201cWe used to say that corruption fights back, and here we can say the same. Tax evaders fight back,\u201d said committee member Eva Joly.<\/p>\n<div id=\"attachment_103073\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Moscovici-EU-620w-Thumb-paradise-papers.jpg\" ><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-103073\" class=\"wp-image-103073\" src=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Moscovici-EU-620w-Thumb-paradise-papers.jpg\" alt=\"\" width=\"300\" height=\"166\" srcset=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Moscovici-EU-620w-Thumb-paradise-papers.jpg 620w, https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Moscovici-EU-620w-Thumb-paradise-papers-300x166.jpg 300w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-103073\" class=\"wp-caption-text\">Pierre Moscovici addressing the PANA Committee.<\/p><\/div>\n<p>Pierre Moscovici, the European Commission member responsible for Economic and Financial Affairs, Taxation and Customs, called for quick action on this issue.<\/p>\n<p>\u201cThis aggressive tax planning is even more shocking because a lot of it is legal,\u201d he said.<\/p>\n<p>\u201cWe can\u2019t accept the way things are at the moment. If the law allows this, we need to change the law.\u201d<\/p>\n<p>The EU will also disclose its own <a target=\"_blank\" href=\"https:\/\/www.icij.org\/investigations\/paradise-papers\/eu-encouraged-name-european-states-tax-haven-blacklist\/\" >list of tax havens<\/a> next Tuesday. However, the list will exclude EU countries \u2013 something that was a point of contention among committee members.<\/p>\n<p>Oxfam published its own <a target=\"_blank\" href=\"https:\/\/www.oxfam.org\/en\/pressroom\/pressreleases\/2017-11-27\/effective-eu-tax-haven-blacklist-must-include-least-35-countries\" >black list<\/a> on Monday, which included four EU member states: Ireland, Malta, Luxembourg and the Netherlands. Each of those states were also found in ICIJ\u2019s investigations.<\/p>\n<p>The question of unfair practices within the EU was raised multiple times, given that the Paradise Papers revelations shed a light on tax-optimization schemes offered by EU states, including Ireland and the Netherlands.<\/p>\n<p>Some committee members raised the notion of a minimum tax rate across the EU.<\/p>\n<p>Moscovici brushed off the question as not in keeping with tax sovereignty. \u201cIt\u2019s not up to me to decide.\u201d<\/p>\n<p>The committee also specifically asked the Paradise Papers journalists about the gap they saw between what was legal and the spirit of the law.<\/p>\n<p>Clerix said it was \u201cvery hard to explain to citizens\u201d why governments set up rules that allow some taxpayers to benefit more than others.<\/p>\n<p>\u201cJust talk to any citizen who is paying tax in a normal way\u2026 they will explain to you what is fair and not fair,\u201d he told the committee.<\/p>\n<p>Bowers said, the laws had been \u201cstretched to extent\u201d that they don\u2019t make sense to ordinary people anymore.<\/p>\n<p>\u201cIt just doesn\u2019t feel right.\u201d<\/p>\n<p>Moscovici also praised the work of ICIJ.<\/p>\n<p>\u201cWe have the ICIJ journalists here. We should be thanking them for their work, congratulating them for their work.\u201d<\/p>\n<p>_____________________________________________<\/p>\n<p style=\"padding-left: 30px;\"><a href=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Cecile-S.-Gallego.jpg\" ><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-103074\" src=\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2017\/12\/Cecile-S.-Gallego.jpg\" alt=\"\" width=\"96\" height=\"96\" \/><\/a><em>Cecile S. Gallego<\/em><em> is a data journalist and researcher for <\/em>ICIJ<em>. She graduated in 2014 from Columbia Journalism School (US) and Sciences Po Journalism School (France) with a master\u2019s degree in investigative reporting. She is a 2014-2015 <a target=\"_blank\" href=\"http:\/\/brown.stanford.edu\/magic\/earnings_inspector\" >Brown Institute Magic Grantee<\/a>, working on a investigative data project aiming at making financial statements of public companies more transparent and more accessible to journalists. She previously contributed to the French webzine Slate.fr.<\/em><\/p>\n<p style=\"padding-left: 30px;\"><em>The International Consortium of Investigative Journalists is a global network of\u00a0<a target=\"_blank\" href=\"https:\/\/www.icij.org\/journalists\" >more than 190 investigative journalists in more than 65 countries<\/a>\u00a0who collaborate on\u00a0<a target=\"_blank\" href=\"http:\/\/www.icij.org\/projects\" >in-depth investigative stories<\/a>. Founded in 1997 by the respected American journalist Chuck Lewis, ICIJ was launched as a project of the <a target=\"_blank\" href=\"http:\/\/www.publicintegrity.org\/\" >Center for Public Integrity<\/a> to extend the Center\u2019s style of watchdog journalism, focusing on\u00a0<a target=\"_blank\" href=\"http:\/\/www.icij.org\/blog\/2012\/08\/essential-elements-powerful-global-investigative-reporting\" >issues that do not stop at national frontiers<\/a>: <strong>cross-border crime, corruption, and the accountability of power<\/strong>. Backed by the Center and its computer-assisted reporting specialists, public records experts, fact-checkers and lawyers, ICIJ reporters and editors provide real-time resources and state-of-the-art tools and techniques to journalists around the world.<\/em><\/p>\n<p><a target=\"_blank\" href=\"https:\/\/www.icij.org\/blog\/2017\/11\/paradise-papers-european-parliament-pana-committee\/\" >Go to Original \u2013 icij.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>28 Nov 2017 &#8211; A European Parliament committee has grilled Paradise Papers reporters as members grapple with how to claw back millions being lost to new, elaborate tax-reducing maneuvers.<\/p>\n","protected":false},"author":4,"featured_media":102114,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-103071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/103071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=103071"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/103071\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/102114"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=103071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=103071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=103071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}