Thursday

29th Sep 2016

New court appeal clouds LuxLeaks whistleblowers future

  • PricewaterhouseCoopers helped companies obtain at least 548 tax rulings in Luxembourg from 2002 to 2010. (Photo: Mélanie Poulain)

Luxembourg's justice department says whistleblowers who revealed massive state sanctioned tax evasion may or may not face harsher sentences after a public prosecutor opened a counter-appeal against them earlier this week.

Henri Eippers, a spokesperson from the justice department, told EUobserver on Thursday (4 August) that public prosecutors filed a general appeal against the three defendants in the so-called LuxLeaks scandal.

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"It is just to have a global view on the file and to have all three together," he said.

Antoine Deltour and Raphael Halet were each given 12 and 9 month suspended jail sentences in June for handing over thousands of documents from PricewaterhouseCoopers (PwC) to journalist Edouard Perrin.

Perrin, who had first exposed the scandal on French television in 2012, was acquitted of all charges.

The documents show how multinationals used Luxembourg's public tax rulings to avoid paying billions in tax in other countries.

The full scale of the scandal came to light in November 2014 when the International Consortium of Journalists released a series of articles on the Luxembourg schemes.

They found that big companies like Pepsi, IKEA, and Deutsche Bank had slashed their tax bills from the 29 percent corporate tax rate to close to zero.

The revelations are a major embarrassment for the European Commission, whose president Jean-Claude Juncker was both prime minister and finance minister of Luxembourg at the time of the rulings.

Both Deltour and Halet have since appealed against their verdict.

Eippers said the move by the public prosecutor to lodge a general appeal last week is standard procedure. It means all three will have to respond, including Perrin who was acquitted.

"For the moment, it is not said that the state prosecutor will demand harsher sanctions against Mr Perrin, that is not said," said Eippers.

Perrin targeted

Tove Maria Ryding, tax justice coordinator at the European Network on Debt and Development, described the appeal as shocking.

"We fully understand why the two whistleblowers appealed their sentences, which were extremely harsh,” she said.

“But the court decided to let the journalist go free without punishment. It's quite shocking that Luxembourg doesn't just step back and let him go, but instead seems determined to pursue Mr Perrin too."

Fabio de Masi, a German MEP from the United Left, who helped spearhead an EU parliament inquiry into the scandal said Luxembourg's public prosecutor would be better off probing Marius Kohl, a high-ranking, now retired official in Luxembourg's tax agency, who helped broker the deals.

"Why is the prosecutor not investigating Marius Kohl instead who provided PwC with the official letterhead of the Luxembourg administration, which is highly corrupt," he said an email.

De Masi said the EU needs whistleblower legislation to help protect people who expose breaches to EU laws.

"I fear the Juncker commission will not protect Perrin, Deltour and Halet from this mafia style prosecution," he said.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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