Sunday

20th Jan 2019

Magazine

The year that almost saw a clampdown on tax evasion

  • Austria and Luxembourg keep making u-turns (Photo: .michael.newman.)

What do Russian oligarchs have in common with the campaign treasurer of French President Francois Hollande? Or Greece's richest with the family of Azeri autocrat Ilham Aliyev?

They were all listed in "Offshore Leaks," a database of over 130,000 offshore accounts obtained by Gerard Ryle, an Australian reporter who heads the Washington-based International Consortium of Investigative Journalists.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Experts say the bulk of the world's privately-held wealth is in opaque 'discretionary structures' (Photo: Alan Cleaver)

The consortium gave access to the data to over 80 media around the world, including EUobserver.

Some of the news reports which followed led to the resignation of Herbert Stepic, the CEO of Austria's Raiffeisen Bank International, after revelations he owned secret firms in the Caribbean.

French President Francois Hollande was left with a red face when it emerged that his former campaign treasurer, Jean-Jacques Augier, held shares in offshore companies.

The embarrassment was all the greater because the Augier news coincided with the admission, by France's former budget minister, Jerome Cahuzac, that he had lied for 20 years about having €600,000 in foreign accounts.

Meanwhile, an investigative report into offshore holdings by a former Macedonian minister, Zanko Cado, published on EUobserver in October, proved that he was instrumental in the demise of state-owned companies in Serbia.

On the EU policy side, Offshore Leaks gave some tailwind to slow-moving initiatives on tax evasion.

EU tax commissioner Algirdas Semeta said the investigative reports helped him to revive the proposals.

"Citizens, people in member states have started paying much more attention to how their countries can collect taxes which are due under national law … If you ask me, I personally think Offshore Leaks could be identified as the most significant trigger behind these developments," he said.

The developments also shed a glimmer of light into places used to complete opacity.

UK Prime Minister David Cameron forced some of the Caribbean tax havens under British protection to sign up to a tax transparency initiative.

Switzerland lifted some elements of its bank secrecy and signed bilateral agreements on bank information with the US and the UK when they pursue tax cheats.

A deal with Germany is still in the making after the original one was struck down by parliament for being too narrow in scope.

But Austria and Luxembourg, the two last hold-outs on EU automatic exchange of bank data, dug in their heels and opposed an deal after initially promising to do so by the end of the year.

Despite pressure from the EU commission and other member states, Vienna and Luxembourg stood firm and said they want to wait until Switzerland, Liechtenstein, Monaco, Andorra and San Marino sign up.

In parallel, the publication of the leaked "Lagarde list" showed that some 2,000 of Greece's richest people have undeclared Swiss accounts at a time when the bail-out country is struggling to collect tax revenues.

The list is named after International Monetary Fund chief and former French finance minister Christine Lagarde, who had passed on the information to Greek officials in 2010, but to little avail.

Despite the leaks and the EU proposals, finance consultancies continue to create new "discretionary structures" to ensure the world's wealthiest people and corporations can still pursue their old habits of paying little or no tax at all.

This story was originally published in EUobserver's 2013 Europe in Review Magazine.

Click here to read previous editions of Europe in Review magazines.

EU bleeding untold billions to fraud

Over €6bn of EU taxpayers' money was stolen by criminals in recent years and over €130m is still being lost each year, EU auditors said.

ECB takes over ailing Italian bank

Decades of mismanagement appear to have caught up with Italy's Carige bank as the European Central Bank takes control in a move to stave off another banking crisis.

Analysis

China's 2019 growth outlook

As China's growth seems to be slowing, some observers see the country amid what the New York Times called a "severe downturn". As they mistake China's secular deceleration with cyclical fluctuations, they miss the rapid increase in Chinese living standards.

News in Brief

  1. EU trade commissioner asks for green light for US talks
  2. Slovakia's commissioner takes unpaid leave to run for presidency
  3. Minority elects Lofven as prime minister of Sweden
  4. Putin opposes EU prospects of Serbia and Kosovo
  5. Tsipras launches campaign to ratify Macedonia deal
  6. US-EU meeting in doubt after Trump cancels plane
  7. Germany and China to sign pact on finance cooperation
  8. Labour divided on second Brexit vote plan

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. Aachen treaty and Brexit endgame This WEEK
  2. Germany led way on EU rights protection
  3. How to troll the European Parliament elections
  4. MEPs in Strasbourg: everywhere but the plenary
  5. Brexit delay 'reasonable', as May tries cross-party talks
  6. MEPs allow Draghi's membership of secretive bank group
  7. EU parliament backs Morocco deal despite row
  8. Barnier open to 'future relations' talks if UK red lines shift

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us