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Panama Papers inquiry: Authorities living in denial - Carthy

13 October, 2016 - by Matt Carthy MEP

Matt Carthy has criticised the attitude of authorities responsible for combating money laundering, tax avoidance and tax evasion following a hearing of the Panama Papers inquiry. The European Parliament’s Panama Papers inquiry committee held its second hearing in Brussels this morning, on ‘Anti-money laundering and tax evasion: Who sets the rules and how?’

The Sinn Fein MEP said:

“Two things became clear from today’s hearing of the Panama Papers inquiry. The first is that there are many and varied limitations in implementing the existing standards, laws and rules.

“The second is that the leadership of many of the institutions responsible for tacking financial crime seem unwilling to acknowledge that this is not only a problem of implementation. There are clearly remaining loopholes in the legislative and regulatory framework.

“First we had the representative from Moneyval tell us that there were many ‘legitimate reasons’ to establish shell companies.

“Then we had the OECD representative tell us that they were perfectly fine with the fact that the US hasn’t signed up to the Common Reporting Standards and have no intention of putting pressure on them to do so. The OECD speaker also repeatedly rejected the view expressed by MEPs that there was any room for improvement in the international standards on establishing beneficial ownership.

“The Commission representative stated that the revision of the EU’s Anti-Money Laundering Directive was already going beyond the recommendations of the Financial Action Task Force, and refused to acknowledge the major remaining loopholes on beneficial ownership.

“Only the United Nations speaker, Michael Lennard, outlined the need for significant change in the international framework for tackling tax evasion and money-laundering.

“The most disturbing evidence was from the European Banking Authority. The EBA representative explained that despite the huge number of potential crimes carried out by the financial institutions under its supervision exposed in the Panama Papers, the EBA is only investigating 'very few' of these cases because a third party must make a formal complaint in order to initiate the process.

“She explained that in a Joint Committee of all the EU financial supervisory authorities, only the EBA is actually dedicating resources to combating money-laundering by European financial institutions. And these resources are hiring one member of staff who is not even full-time!"

Carthy concluded:

"Of course implementation of existing standards is an urgent priority, as is resourcing enforcement. But we also need to identify where these new standards fail, and where they can be improved, and the defensive attitude from many of the authorities we heard from today is counterproductive.”


Note to editors: Full list of speakers

 Michael Lennard, Chief, International Tax Cooperation Section U.N. Dept. of Economic and Social Affairs - United Nations (UN) (via videoconference)

 Caroline Malcolm, Senior Counsellor and Advisor to the Director and Deputy Director at the OECD’s Centre for Tax Policy and Administration (via videoconference)

 Daniel Thelesklaf, President of the Committee on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

 Isabelle Vaillant, Director for Regulations, European Banking Authority (EBA)

 Alexandra Jour-Schroeder, European Commission, DG-JUST

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