During the plenary session of the European Parliament in Strasbourg (4-7 October 2021), MEPs debate on the implications of the efforts to combat money laundering, tax evasion and avoidance (after the publication of the so-called journalistic investigation 'Panama Papers'). Opening statements by Anže LOGAR, Slovenian Minister of Foreign Affairs and by Paolo GENTILONI, European Commissioner for Economy. This transcription speech is the result of an automatic process. Check against delivery.

statement

Strasbourg

debate

plenary session

fight against tax fraud and evasion (T)

GENTILONI, Paolo (IT, EC)

LOGAR, Anže (SI)

Pandora Papers - implications on the efforts to combat money laundering, tax evasion and avoidance: opening statements by Anže LOGAR, Slovenian Minister of Foreign Affairs and by Paolo GENTILONI, European Commissioner for Economy

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, Madam Chair, Dear Commissioner, honourable members. Thank you for the opportunity to discuss here in the plenary, the so-called Pandora papers. Revelations of this kind are not new and have, in fact, regularly appeared in the media in the past few years.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, The most recent data gathered in the context of the Pandora papers should be the subject of further analysis by all the institutions concerned. In particular, member states to find out whether illegal operation have indeed taken place. Of course, it is not up to the Council to pronounce itself on any specific case mentioned in the most recent revelation.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, .But these revelations show once more how important the ongoing efforts in the area of fighting tax fraud and evasion remain. The EU will continue to strongly support work in this field. Since the council has started working on this issue, we have reached quite some progress in the area of fighting evasive practises over the last few years, be it in the area of money laundering or in the field of taxation.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, Regarding anti-money laundering on financial secrecy, a lot of progress has been made on enhancing financial transparency through the successive Anti-Money Laundering Directives. One of the aspects that merits highlighting in the introduction of the member states of publicly available register for companies, trusts and other legal arrangements, which has already yielded some results.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, In this context, I would like also like to mention the anti-money laundering package that the Council has received over the summer. One of the aims of the package is to close loopholes used by criminals to launder illicit proceeds through the financial systems. The article by article examination of the proposal is ongoing in the competent working parties, and even through this will require thorough discussion.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, The Council is determined to move towards a mandate for negotiation with the Parliament in a swift manner. Regarding tax transparency, in the area of taxation there has been significant progress on transparency. Thanks to the various directives in the field of administrative cooperation, the so-called Doc Directive member states have the tools to exchange a wide array of that data relating to taxation.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, Thanks to Docs six on cross-border aggressive tax planning, for instance, intermediaries are now under an obligation to report dubious schemes to tax authorities. Administrative cooperation is regarded as priority in the fight against aggressive tax planning worldwide. Exchange of information is essential between member states, as well as with third countries.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, The two anti-tax avoidance directives have also given an impetus to make the use of shell companies less attractive by introducing rules and controlled foreign companies and hybrid mismatches just to name a few aspects.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, In this context, I think that the forthcoming legislative proposal targeted to the use of shell companies will be particularly relevant, and we are looking forward to receiving it from the Commission as soon as possible.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, In the EU is also contributing in the move towards more transparency through the significant global influence of the EU list of non-cooperative jurisdictions for tax purposes. Since 2017, through a cooperative approach, coupled with the necessary deterrence, the EU has been able to convince a large number of third countries to become more transparent and limit the effect of their taxation regime on other countries.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, Of course, the work is not finished, and the Code of Conduct Group will continue to engage with those of third countries to improve tax transparency, also in coordination with the OECD. Focussing more specifically on the fight against tax avoidance, one of the work strands in the OECD discussions on digital taxation is a global minimum effective tax rate.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, The so-called Globe, which could reshape global taxation arrangement in a fundamental way. In its conclusion of November last year, the Council spoke out in favour of a global deal, and I sincerely hope that the statement that is being negotiated will gain as much support as possible at the OECD and G20 so that an agreement can be implemented globally in the coming years.

SOUNDBITE (English), Anže LOGAR, Slovenian Minister of Foreign Affairs, Thank you very much for giving me the possibility to share and listen today's discussion and to explain the Council point of view and lines of action in this extremely topical subject.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, Madam President, honourable members, first of all, let me thank the European Parliament for the immediate and strong reaction and the decision to organise this debate on the Pandora papers. The Pandora papers are the latest in a series of revelations by investigative reporters.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, And this is thanks to the meticulous work that tax fraud and evasion is on the front pages. The Commission has been extremely proactive over the past few years in tackling such issues to increase tax transparency, to fight aggressive tax planning and tax avoidance, to combat money laundering with our new package adopted by the Commission in July.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, We now have a legislative framework in place in the EU with some of the highest tax transparency standards and anti-money laundering standards in the world. I'm sure that you all know how many times the Directive on this cooperation has been amended to include new areas of automatic exchanges of information and strengthen existing provision of administrative cooperation.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, We plan to continue expanding its scope to include new assets on which to exchange information between member states and the tax rulings made for rich individuals. So why, if so much has been done, we still have the kind of revelation that hit the headlines in the last days.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, Well, first, I think and more generally, some of the measures that we have tabled in the past years are still to be fully implemented by member states to be effective results. But second, of course, we have to keep in mind that tax avoidance and evaders also develop new practises to circumvent the measures in place and that the economic activities are more mobile and faster than any legislator around the world.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, These leaks demonstrate that we cannot be complacent and we need to work continuously to further strengthen our armoury against tax abuse. This is now more crucial and ever as we work to leave behind the economic downturn and to ensure that the costs of the crisis are shared fairly between taxpayers.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, It is only in this way that member states will have the fiscal space to support the economic recovery. With this in view, the commission is preparing new legislative initiatives that will enhance tax transparency and bring new elements under the umbrella of automatic exchange of information to reinforce further the fight against tax evasion and avoidance.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, This includes a legislative proposal that will tabled before the end of this year to tackle the misuse of shell companies for tax purposes. And we all know also through the Pandora papers what a key role these shell companies can play in global tax evasion.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, We will also table a proposal on the publication of effective tax rates paid by some multinationals. To conclude some words on the EU listing process and how it can be used by us collectively to tackle tax havens. We have achieved results and we have obtained legislative changes in several jurisdictions through this process.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, And progress is picking up if you look at the increasing number of committees jurisdiction which are now listed in Annexe two, our so-called grey list. In particular, in these cases, we are working to ensure economic substance in jurisdiction to which tax advantages are granted and to keep track of the economic activities that take place there.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, Once minimum effective taxation reached with the possible agreement at the G20 level on the OECD proposal, when this a minimum effective taxation will start applying, I think that our perspective on economic substance might reveal a potential for upgrading.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, Of course, we also need to review the criteria to make them more effective, as announced in the tax good governance communication. We need to make progress in order to secure a major role for the EU list in the new international tax architecture.

SOUNDBITE (English), Paolo GENTILONI, European Commissioner for Economy, In conclusion, I can assure you that with your support, with the European Parliament's support, we will make it harder and harder for tax avoiders to carry on not paying their fair share. Thank you.