Monday

25th Jun 2018

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.

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.

... our join as a group

  • 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.

EU leaders still in search of migration plan

Select EU leaders met amid rising tension over migration, with Italy's PM, who had threatened to boycott the summit, putting forward a new plans to stop boats from leaving Libya.

Feature

EU and Turkey fight for 'lost generation'

Some 300,000 school-age Syrian children in Turkey are not enrolled in classes. Fears they may end up in sweatshops or forced to beg have triggered efforts by the EU, Unicef, and the Turkish government to keep them in school.

News in Brief

  1. Nine countries to sign up for Macron's military initiative
  2. Re-elected Erdogan potentially in power until 2028
  3. Macron's popularity drops among French pensioners
  4. Tajani calls for €6bn investment to halt migration
  5. Major demo in London for second EU referendum
  6. Venice Commission: Hungary should repeal NGO law
  7. Trump threatens to slap 20 percent tariff on EU cars
  8. EU closes deficit procedure against France

Stakeholders' Highlights

  1. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  2. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  3. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  4. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  5. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  6. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  7. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  8. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  9. Mission of China to the EUChina: Work Together for a Better Globalisation
  10. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  11. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  12. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform

Latest News

  1. Progressive CAP alternative only hope for sustainability
  2. Ponytailed green MEP joins 'the other side of the table'
  3. EU leaders still in search of migration plan
  4. Migration row at centre of EU summit This Week
  5. Merkel's woes cast shadow on EU's future
  6. Europe's tech race - trying to keep pace with US and China
  7. Merkel and Juncker's mini-summit risks fiasco
  8. Greece and creditors proclaim 'end of crisis'

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  2. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  3. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  4. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  5. FIFAGreen Stadiums at the 2018 Fifa World Cup
  6. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  7. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  8. FIFARecycling at the FIFA World Cup in Russia
  9. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  10. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  11. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  12. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece

Join EUobserver

Support quality EU news

Join us