The Pandora Papers leak
reveals, once again, that to avoid taxes and the corrupt are transferring money out of poorer countries into more developed ones without proper controls. Much of this is preventable: we know what needs to be done to track illicit financial flows, to recover stolen assets, and to ensure that everyone pays their fair share of tax. One such instrument is open company registers. But to ensure that everyone is fiscally equally we first need politicans which are transparent themselves and which are not driven by ego but by state sense.
Change of money greedy system could bring relief
Currently we can watch the US collapsing, all its values and their whole ultra capatalist system based on fear, competition and ego. If the political leaders do not mean for themselves and their friends what they preach than it will be hard to stop tax evasion. Everyone agrees on the value of company registration and beneficial ownership data being open. It’s been promised by governments in the G8 Action Plan
to Prevent Misuse of Companies (2013) and the London Anti-Corruption Summit (2016). It’s in the Open Government Partnership Paris Declaration (2016), and was echoed in the Political Declaration of the UN General Assembly Special Session on Corruption in June 2021.
The EU should be pioneer in an equal fiscal policy
The 27 Member States of the European Union have agreed and, along with the European Parliament, they adopted the Open Data Directive
(2019), which says that company data is a “high-value dataset” and should be published as open data, free of charge, for all to use. Rather than having in place the essential tool of open company registers, we learn the truth about the use of shell companies to launder money through offshore tax havens only thanks to the bravery of whistleblowers and the heroic work of investigative journalists who have trawled through 12 million documents. We learn – too late – where the money has gone. We already know, only too well, the impact it has on national economies, with tax evasion, fraud, and corruption resulting in less money for public services, health, education, or addressing climate change.
The UN Convention against Corruption and other anti-corruption treaties are replete with measures that could help us to prevent this. With open company data there can be constant vigilance of company structures, rapidly revealing the kinds of shell company structures that the Pandora Papers
have exposed. We have opened Pandora’s box and inside we see clearly the ills of our global financial system. The EU’s Open Data Directive, which promises us open company registers, should have been brought into law in Member States by July 2021, and many have transposed it, but they are waiting for the Implementing Act from the European Commission.
Europe has to be brave and firm
The European Commission has been dragging its heels, most likely under pressure from a handful of countries such as Germany, Italy, and the Netherlands, concerned about the revenue losses from selling company data. I
n addition, some countries have raised concerns about the costs of transforming registers into open formats. Some say it’s about data protection, but this is not true: anyone with the money can buy a company register. Access Info’s research from 2016 found that a full register can be obtained for prices ranging from €75,000 in the Netherlands to €286,000 in Estonia. As the Pandora Papers show us, those who wish to protect their “personal data” are often very high-profile public figures who have something to hide.
There are indeed costs to cleaning up and opening datasets, but in the balance also are massive savings, which are identified in an Impact Assessment carried out for the Commission in August 2020 by private consultancy firms, with quantifiable economic benefits of fully open company data including:
Business opportunities worth thousands of millions of euros (in the UK alone estimated value €780 million);
Significantly reduced costs for Europe’s 24 million SMEs both in reporting and in checking ownership of other companies;
Easier to discover and deter money laundering, which, according to Europol, costs the EU almost €200 billion per year;
Decrease of corruption in public procurement, which costs the EU around €5 billion per year.