Saturday

19th Aug 2017

Panama Papers: EU's Canete implicated in leak

  • Canete (r) is the EU's top official on climate and energy issues (Photo: European Parliament)

The wife of EU climate and energy commissioner Miguel Arias Canete has been named in a huge leak of documents relating to offshore companies called the Panama Papers, which have also led to accusations of shady financial dealings by the leaders of Iceland, Russia and Ukraine.

The findings, published by several media on Monday (4 April), originated in a cache of 11.5 million electronic files belonging to Panama-based law firm Mossack Fonseca that were initially given by an anonymous source to German daily Sueddeutsche Zeitung in early 2015.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Poroshenko (l) likely to take more political flak than Putin (Photo: ec.europa.eu)

They show that Canete’s wife, Micaela Domecq Solis-Beaumont, who comes from the wealthy Domecq family, was empowered to approve financial transactions in Rinconada Investments Group, a Panama-based firm created in 2005.

Offshore firms such as Rinconada may have legitimate business purposes but are often created to hide wealth in order to pay less tax.

Rinconada existed while Canete held public office in Spain and the European Union.

Canete’s office told the International Consortium of Investigative Journalists (ICIJ), a Washington-based body that worked with Sueddeutsche Zeitung, that his assets were “administered separately” to those of his wife, and that his declarations were in “full compliance” with the EU's code of conduct.

His wife’s lawyers also told the ICIJ that “she had declared all of her income and assets to Spanish tax authorities”.

The Panama revelations are likely to cause discomfort for the commission after an earlier affair, dubbed Lux Leaks, indicated that commission president Jean-Claude Juncker in his time as Luxembourg PM helped orchestrate corporate tax avoidance deals.

But the latest revelations are likely to be much more damaging for governments in Iceland and Ukraine.

The Iceland leaks show that prime minister Sigmundur David Gunnlaugsson, finance minister Bjarni Benediktsson and interior minister Olof Nordal all had links to offshore firms that they failed to disclose.

The Gunnlaugsson-linked firm, Wintris, was created for the prime minister with the help of Landsbanki, a lender which collapsed in Iceland’s 2008 financial crisis.

Gunnlaugsson failed to disclose Wintris even though his government pushed through a decision in which more of the recovered money would go to Landsbanki creditors, including Wintris, instead of back to the state.

Benediktsson, the finance minister, held an undeclared 33 percent share in a Seychelles-registered firm Falson, which was used to buy properties in Dubai.

Nordal had links to Panama-based firm Dooley Securities but said she never declared it because the firm was never active.

The Ukraine revelations, compiled by the Organized Crime and Corruption Reporting Project (OCCRP), an ICIJ partner, indicated that president Petro Poroshenko used Mossack Fonseca to try to protect his private wealth at a time when Ukrainian soldiers were being killed on the battlefields of east Ukraine in August 2014.

They show that the billionaire businessman used a Cypriot firm, Dr K Chrysostomides & Co, as well as the Panamanian firm, to create an offshore entity, Prime Asset Partners, which was registered in the British Virgin Islands.

His lawyers told OCCRP that its creation had nothing to do with the escalation in violence in east Ukraine and that he never declared it because his stake in Prime Asset Partners had no financial value.

But OCCRP found that Poroshenko's stake had a nominal value of at least $1,000.

The Iceland and Ukraine revelations are damaging because both Gunnlaugsson and Poroshenko had promised to clean up their countries’ dodgy financial sectors.

The Russia revelations, where people, according to opinion polls, are broadly tolerant of high-level corruption, are likely to have less of an impact.

They indicate that Russian leader Vladimir Putin’s closest friend, Sergei Roldugin, a professional cellist whom he has known since his childhood, used Mossack Fonseca as well as Cyprus-based entities to create a web of financial interests worth up to $2 billion.

They show similar activities by two other close Putin associates, Arkady and Boris Rotenberg.

The list of people implicated in Panama Papers also covers the late father of British PM David Cameron, the Spanish royal family, the government of former Greek PM Antonis Samaras, a former French minister, a Maltese energy minister, a former Warsaw mayor and a number of British MPs.

Juergen Mossack, one of the two founders of the Panamanian company, was the son of a former Nazi officer who fled Europe to evade justice.

Ramon Fonseca, the other founder, is an award-winning Panamanian novelist who later became a political adviser.

The files obtained by Sueddeutsche Zeitung go back over decades and shows that celebrities, hardened criminals, and African and Middle East dictators used the same company as some of Europe’s top politicians and their relatives to conceal money.

EU may impose full tax transparency on US firms

Big US firms like Google and Amazon could be forced to reveal their earnings and tax rates to the wider public as the European Commission mulls a new proposal set for April.

News in Brief

  1. Macedonia sacks top prosecutor over wiretap scandal
  2. ECB concerned stronger euro could derail economic recovery
  3. Mixed Irish reactions to post-Brexit border proposal
  4. European Union returns to 2 percent growth
  5. Russian power most feared in Europe
  6. Ireland continues to refuse €13 billion in back taxes from Apple
  7. UK unemployment lowest since 1975
  8. Europe facing 'explosive cocktail' in its backyard, report warns

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides

Stakeholders' Highlights

  1. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  2. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  3. Martens CentreWeeding Out Fake News: An Approach to Social Media Regulation
  4. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  5. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug
  6. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  7. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  8. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  9. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School
  10. EPSUEP Support for Corporate Tax Transparency Principle Unlikely to Pass Reality Check
  11. Counter BalanceEuropean Parliament Improves the External Investment Plan but Significant Challenges Ahead
  12. Nordic Council of MinistersCloser Energy Co-Operation Keeps Nordic Region on Top in Green Energy