Politicians and tax authorities on several continents launch new investigations after Pandora Papers

Lawmakers in the European Union and the United States are proposing reforms in response to the Pandora Papers, a global survey of offshore secrecy conducted by the International Consortium of Investigative Journalists.

On Wednesday, the European Commission’s tax chief, Paolo Gentiloni, said the commission would push for new legislation to crack down on tax avoidance in the wake of the Pandora Papers.

Gentiloni pledged to push for laws that “will tackle the misuse of shell companies for tax purposes” without providing details, according to Reuters. Among the proposals would be new rules to expand the categories of information that would be automatically shared between tax authorities in various countries, according to Reuters.

He also said the EU would propose new rules “on the publication of the effective tax rates paid by certain multinationals”.

In the United States, lawmakers said they would respond to the Pandora Papers with new legislation targeting financial professionals and other businesses that transfer dirty money for corrupt clients.

The proposed measure would require lawyers, accountants, real estate professionals, trust administrators, art dealers, financial advisers and public relations professionals to do more to ensure they are not contributing to money laundering.

“The revelations in the Pandora Papers are the clearest demonstration yet of the historic threat posed by foreign corruption,” U.S. Representatives Tom Malinowski and John Curtis said in a joint statement. “Billions of dollars of dirty money belonging to opposing actors are flooding the United States.”

The bill is expected to be officially introduced in the US Congress on Friday.

The Pandora Papers reports, based on a cache of more than 11.9 million documents obtained by the International Consortium of Investigative Journalists, covered more than 110 countries. The political fallout from the investigation continued to reverberate across multiple continents.

The chairman of a Czech Senate committee on Wednesday called for investigations into Czech Prime Minister Andrej Babis’ offshore deals revealed in Pandora Papers reports. The ICIJ investigation shows that Babis secretly purchased a lavish estate in the Cote d’Azur area using offshore companies. He denied wrongdoing.

The head of the public procurement committee, Lukas Wagenknecht, said Babis’ conduct “bears the signs of a criminal act of failure to comply with the obligation to register transactions in the tax system”, according to articles. Czech press. The commission will ask the Czech National Bank to review the prime minister’s dealings, according to media reports.

In Brazil, a house of Congress has voted to call on Economy Minister Paulo Guedes to answer questions before the legislature about the Pandora Papers revelations about Guedes’ offshore activities, according to news reports. Guedes’ hearing has yet to be set.

In Peru, the special prosecutor investigating the corruption case known as Operation Car Wash said he would seek further statements from former President Pedro Pablo Kuczynski. The prosecutor said authorities needed Kuczynski to clarify the role of a BVI company he set up when he was economy minister. The prosecutor said the company was used to secretly transfer money and that Kuczynski never included it in his asset declarations.

In Paraguay, a criminal complaint has been filed against former President Horacio Cartes, alleging he violated the law by failing to include an offshore company in his asset declaration while he was president. The president of the Liberal Party of Paraguay filed a complaint.

ABC Color reported that Cartes operated a Panamanian company incorporated in 2011 but did not disclose it in his asset declarations when he was president. Cartes amended its statement to include the company after receiving questions from reporters in September.

Meanwhile, some politicians and elected officials are calling on Colombian tax chief Lisandro Junco to step down, after an investigation by the Pandora Papers of El Espectador and CONNECTAS revealed his offshore dealings.

ICIJ partners reported that documents in the Pandora Papers leak linked Junco to a Delaware company, an account in Cyprus and a virtual office in London operated by a Dubai-based supplier. Junco replied that he publicly declared the company from Delaware, that he moved to Florida in 2016. The company only operated a savings account in Miami, where he planned to study, he said. he declares. He denied having assets in Cyprus and London and said in a statement posted on Twitter that the United States, Cyprus and London are not considered tax havens by the Colombian authorities.

The Pandora Papers revealed the key role of Swiss advisers in the global offshore financial system. In the aftermath of the revelations, politicians from the Swiss Socialist Party proposed reforming the anti-money laundering law and extending due diligence obligations to consultants, notaries and lawyers – a proposal that the Swiss parliament rejected in March.

In Indonesia, the Financial Transaction Reports and Analysis Center, known as PPTAK, said it was reviewing Pandora Papers reports and comparing them with their own database, according to Tempo magazine, an ICIJ partner. . “If, based on the matching, there are strong indications that the individuals have acted against the law or that their financial profile does not match their tax obligations, then PPATK will provide the authorized agency with the outcome of our analysis,” said the head of the agency. , Dian Ediana Rae, reportedly said. The move is significant in part because Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto and Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan are named in Tempo’s Pandora Papers reports.

Meanwhile, a growing list of tax administrations around the world are joining officials from more than a dozen countries in pledging to take action on the findings of the Pandora Papers.

The Australian Revenue Authority on Wednesday froze more than $80 million in assets and businesses linked to developer Jim Raptis which the Australian Financial Review reported in the Pandora Papers. The newspaper said the ATO had previously alleged that Mr Raptis, members of his family and associated entities were involved in “tax avoidance arrangements”.

In the UK, Chancellor Rishi Sunak promised that the country’s tax authorities would review information from the Pandora Papers to determine if any breaches had occurred. “As you have seen from the [Pandora] paperwork, it’s a global issue,” Sunak said. “There is a global dimension and we need other countries to cooperate with us to deal with it, but we are determined to do so.”

Argentine and Chilean tax authorities said this week they would investigate the offshore transactions revealed in the Pandora Papers.

France’s economy minister said his agency would look into whether French residents are revealed in the Pandora Papers. “If French tax residents were to be involved in abusive tax schemes, the Directorate General of Public Finances, at my request, would immediately take the necessary measures in connection with justice to recover all of the sums due,” said Bruno. The mayor.