Saturday

27th Aug 2016

EUobserved

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • 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 article was printed in EUobserver's yearly magazine 'Europe in review 2013'. The print edition looks back at the most important stories of the year. To obtain a copy of the magazine, please contact mc@euobserver.com. Price per copy €4.75 + postage, excl. vat. Discounts on larger purchases.

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey