In April 2016, an unparalleled leak of information, named
the “Panama Papers”, caught the attention of the whole world. The
documents from the database of the world’s fourth biggest offshore
law firm, Mossack Fonseca, provided “behind the scenes” information
on how wealthy people disguise their financial assets in order to
avoid tax scrutiny.
Besides billionaires, celebrities and criminals, the names
of 143 politicians and their associates from around 50 countries
are mentioned in the documents as having used offshores for tax
avoidance and tax evasion purposes. Even though legitimate ways
of using tax havens exist, offshore jurisdictions are known for
the creation of shell companies hiding the real beneficial owners.
Such practices are common for aggressive tax avoidance, hiding illicit
wealth and for the concealment of financing of terrorists, drug
cartels, criminals and corrupt politicians.
The “Panama Papers” disclosures demonstrate that the fight
against tax havens and the establishment of fiscal transparency
has so far had only limited effect. This report explains how imperative
it remains to find the proper means to ensure technical compliance
with already existing international standards in the field of anti-tax evasion
and anti-money laundering policies. Member States should ensure
effective implementation of the standards in all sectors – financial,
legal and law enforcement, while also encouraging stronger action
at international level.