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03/12/2016

Panama Papers committee courts public opinion to exert pressure

Euro & Finance

Panama Papers committee courts public opinion to exert pressure

PANA's first public hearing kicked off yesterday, with the journalists who published the papers in attendance.

[European Parliament]

The European Parliament’s Panama Papers inquiries has held its first hearing, with the journalists that first published the leaks in attendance, in a politically charged move against a “system that many European countries are involved in”. EurActiv Germany reports.

Almost six months ago, the release of the Panama Papers dominated news sites, as bureaucrats, bankers and corporate bosses looked over their shoulders. Meanwhile, calm has returned to the tax haven following the “biggest leak in history” and the matter is no longer considered that newsworthy.

The offshore elite have resumed their activities and have put their feet back up, safe in the knowledge that they have weathered the worst of the storm.

Or so you would think. The Parliament yesterday (27 September) moved to send a clear message to the “letterbox company elite” and the general public. In short, the committee wanted to emphasise that “we are on to you”.

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So it was not by chance that the first guests invited to the Panama Papers inquiry (PANA) were the journalists that initially published the leak and got the matter into the spotlight. The committee’s chairman, Werner Langer (EPP), issued what some could perceive as a veiled threat when he announced that it would be exerting “public pressure” on governments, parliaments and citizens.

As a result, the committee will not just be examining the conduct of legal firm Mossack Fonseca, which found itself in the eye of the storm. Langer warned that they would be taking a close look at the “practices of different forces in the market – banks, lawyers and public bodies”.

PANA was set up in June in response to the Panama Leaks, which came to light in the spring. The committee has been set up to investigate what possible failings the EU has made in the fight against tax evasion and money laundering. It has a mandate of one year, which can be extended by three months, twice.

Julia Stein, a journalist with NDR, pointed out that PANA faces an uphill battle from the start, as despite the vast catalogue of documents released in the leak, only a small amount contain hard evidence that can be used.

For example, in the case of Rami Makhlouf, cousin of Syrian dictator Bashar al-Assad and a financier of the regime, there is clear proof that Mossack Fonseca helped circumvent international sanctions against the worn-torn nation. But in most cases, the crucial information needed can only be deciphered by tax inspectors, authorities or even the relevant secret services, Stein added.

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Stein also added that it is outrageous that a dummy company can still be set up relatively easily. The current legal situation means that criminals are provided with the very means by which to disguise their illegal activities and remain undetected. An offshore company is often just a few mouse clicks away.

Fellow journalist Jan Strozyk also said that Europe is “committed to breaking the law”, because of the network of middlemen that operate between offshore companies and their owners, in a system designed to insulate criminal parties from each other and evade law enforcement.

Committee member Jeppe Kofod (S&D) admitted that PANA faces a difficult road ahead of it, breaking up a system that “many European countries are involved in”. His EPP colleague Langer warned against excessively high expectations and said that “we will not turn the world on its head overnight”.

How serious the Parliament committee is about facing up to the challenges posed by the leak remains to be seen. The ambitious objectives and aggressive rhetoric already used by MEPs could prove to be just smoke and mirrors, intended to merely convince people that the EU is capable of self-control in times of crisis.

The Parliament has already shown recently that it is ready to quash transparency measures in order to protect its own interests.

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The sharp words used by the committee could be just a way of grabbing five minutes in the limelight, but it could be argued that this aggressive courting of public attention is the only way in which PANA will get anything done. Without public opinion on their side, the committee is unlikely to achieve anything or exert the right pressure.