Wednesday

28th Jun 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.

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.

  • 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.

Slovenia and Croatia reignite border dispute

Croatia said it would not apply a ruling to be delivered by the international arbitration court on Thursday. Slovenia appeals to the EU to pressure its neighbour.

Stakeholders' Highlights

  1. EU2017EEGet the Latest News from the 2017 Estonian EU Council Presidency @EU2017EE
  2. International Partnership for Human RightsEU-Kyrgyzstan Human Rights Talks Should Insist on Ending Reprisals Against Critical Voices
  3. European Free AllianceEFA Is Looking for a New Intern
  4. Malta EU 2017Conservation of Atlantic Tunas: International Measures Become EU Law
  5. European Healthy Lifestyle AllianceCan Statin Therapy Interfere With a Physically Active Lifestyle?
  6. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  7. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  8. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  9. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  10. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  11. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  12. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  2. Malta EU 2017End of Roaming Charges: What Does It Entail?
  3. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move
  4. Dialogue PlatformMuslims Have Unique Responsibility to Fight Terror: Opinon From Fethullah Gülen
  5. EUSEW17Check out This Useful Infographic on How to Stay Sustainable and Energy Efficient.
  6. Counter BalanceEuropean Parliament Criticises the Juncker Plan's Implementation
  7. UNICEF1 in 5 Children in Rich Countries Lives in Relative Income Poverty, 1 in 8 Faces Food Insecurity
  8. International Partnership for Human Rights26 NGOs Call on Interpol Not to Intervene Versus Azerbaijani Human Rights Defenders
  9. Malta EU 2017Significant Boost in Financing for SMEs and Entrepreneurs Under New Agreement
  10. World VisionYoung People Rise up as EU Signs Consensus for Development at EU Development Days