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Addendum to the report | Doc. 14141 Add. | 10 October 2016
Lessons from the “Panama Papers” to ensure fiscal and social justice
Committee on Social Affairs, Health and Sustainable Development
1. Explanatory memorandum by Mr Stefan Schennach, rapporteur
1. Less than half a year after
the release of the Panama Papers, new, disturbing revelations have
come to light – the so-called “Bahamas Leaks”. This leak of information
from the Bahamas corporate register exposes more than 175,000 offshore
companies, trusts and foundations registered in the Caribbean tax
haven from 1959 to 2016. 
The data was obtained by Süddeutsche Zeitung, whereas the
International Consortium of Investigative Journalists made it publicly
available. Together with Panama and Singapore, the Bahamas remain
one of the countries which have not committed to the multilateral
standard for the exchange of financial information.
The data was obtained by Süddeutsche Zeitung, whereas the
International Consortium of Investigative Journalists made it publicly
available. Together with Panama and Singapore, the Bahamas remain
one of the countries which have not committed to the multilateral
standard for the exchange of financial information.2. Whilst the Panama papers scandal uncovered secret financial
dealings involving politicians from around 50 countries, the Bahamas
leaks put the spotlight on how lack of scrutiny can allow conflicts
of interest involving high-ranked European officials to go unnoticed.
The former European Union commissioner who was dealing with competition
and digital agenda policies between 2004 and 2014 is now known to
have been the director of an offshore company during the period
of 2000-2009. The latter company was funded by the United Arab Emirates,
and intended to take hold of the international assets of the energy
company Enron in a US$7 billion deal. Directoring an offshore company is
not illegal as such, as long as its activities are lawful. What
was missing was an open declaration of a conflict of interest by
the commissioner, as her directorship had never been declared.
Directoring an offshore company is
not illegal as such, as long as its activities are lawful. What
was missing was an open declaration of a conflict of interest by
the commissioner, as her directorship had never been declared.3. However, according to the commissioners’ code of conduct,
it is forbidden to hold any outside directorships while on duty;
the commissioners may not engage in any other professional activity,
whether gainful or not. Commissioners are also obliged to make a
full declaration of their previous activities during the last ten
years, and any financial interest or asset which might create a
conflict of interests in the performance of their duties.
4. Moreover, in addition to my comments concerning the ranking
of Switzerland according to the secrecy and the scale of its offshore
financial activities (2015 Secrecy Ranking by the Tax Justice Network),
the recent peer review of the Organisation for Economic Co-operation
and Development (OECD) found Switzerland to be largely compliant
with the existing international standard for transparency and exchange
of information for tax purposes.
5. I should also draw your attention to the fact that, in addition
to Mossack Fonseca, the following companies have been identified
as intermediaries facilitating the creation of smoke-screen companies
for tax evasion purposes:
- Appleby (provides legal and fiduciary services in financial jurisdictions such as Bermuda, the British Virgin Islands, the Cayman Islands, the Isle of Man, Jersey, Guernsey, Mauritius, Seychelles, the financial centres of Hong Kong and Shanghai);
- Bedell (Jersey, Guernsey, London, Dublin, Geneva, Mauritius and the British Virgin Islands);
- Carey Olsen (the British Virgin Islands, Cape Town, the Cayman Islands, Guernsey, Jersey, London and Singapore);
- Conyers Dill & Pearman (the British Virgin Islands, the Cayman Islands, Mauritius, London, Hong Kong, Singapore and Dubai);
- Harneys (the British Virgin Islands, Bermuda, the Cayman Islands, Cyprus, Hong Kong, London, Montevideo, Shanghai, Singapore, Tokyo, Vancouver and Mauritius);
- Maples and Calder (Cayman Islands, Ireland and the British Virgin Islands).
6. Finally, the most attractive offshore financial centres, as
identified by the private institute Z/Yen, which co-operates with
the OECD and the World Bank, are: the British Virgin Islands, Gibraltar,
the Cayman Islands, the Hamilton Island (Australia), Jersey, the
Isle of Man, Guernsey, Mauritius, the Bahamas, Malta and Cyprus.