EU threatens to put sanctions on Panama, other tax havens


In the wake of the scandal that erupted from the Panama Papers, the European Union has threatened to sanction countries like Panama if they continue to refuse to cooperate to prevent money laundering and tax evasion. The leak of 11.5 million files from the Panama-based law firm Mossack Fonseca continues to create turmoil around the world. The files show billions of dollars stashed away by the public figures, executives and celebrities from around the world. The European Commissioner in charge of tax policy Pierre Moscovici has announced his intention to move swiftly in order to finally draw up a European list of tax havens.

“Now we need a real European list based on new cooperative criteria. I urge countries to agree on a common methodology for that list,” Mr Moscovici said. “I want the list of tax evaders in the next six months.” Iceland’s prime minister Sigmundur David Gunnlaugsson became the first casualty of the global revelations on offshore companies. The scandal has also raised questions about the dealings of the presidents of Argentina and Ukraine, senior Chinese politicians, famous actors, athletes and some friends of Russian president Vladimir Putin.

Panama is currently listed as a non-cooperative tax jurisdiction by eight EU member states. “Panama has not been willing to enter into constructive dialogue with EU. I strongly urge this country to rethink and enter dialogue,” Mr Moscovici said. “The amounts of money, the jurisdictions and the names associated with this … are frankly shocking,” he added. “We have to list [tax havens] through a common EU blacklist and be ready to hit them with appropriate sanctions if they refuse to change.”

Reacting to these developments, the Panama government has decided to create an international committee of experts to recommend ways to boost transparency in its offshore financial industry. Panama’s President Juan Carlos Varela said that the committee’s findings will be shared with other nations so joint action can be taken to boost transparency in legal and financial centres worldwide. At the same time, Mr Varela defended Panama against what he termed a “media attack” by wealthy nations that he says are ignoring their own deficiencies and unfairly stigmatising Panama.

Many European countries such as Luxembourg, Switzerland and Andorra are considered tax havens as they provide banking secrecy to its clients.


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