Panama tax-haven leaks lead EU parliament to form inquiry panel

[STRASBOURG, France] The European Parliament set up an inquiry committee in response to the Panama tax-cheating leaks, seeking to put the spotlight on regulators across Europe.

The European Union assembly gave the special panel a mandate to "investigate alleged contraventions and maladministration in the application of union law in relation to money laundering, tax avoidance and tax evasion." The committee, approved on Wednesday in Strasbourg, France, will be composed of 65 EU Parliament members and have 12 months to produce a report with policy recommendations.

Two months after leaked information about the use of offshore tax havens caused global political tremors, the 28- nation Parliament wants to assess whether the European Commission - the bloc's regulatory arm - and authorities in member countries failed to enforce a series of EU financial laws dating as far back as 2005.

The leak from Panama-based law firm Mossack Fonseca to an international consortium of investigative journalists consisted of more than 11.5 million documents detailing over 214,000 offshore companies, about half of which are domiciled in the Virgin Islands.

"We want to systematically end secrecy on who owns letter- box companies," said Burkhard Balz, a German member of the 751- seat EU Parliament. "If somebody founds a company - be it in Europe, Panama or elsewhere - there must be no secrecy about it."

EU national governments lose 50 billion euros (S$76.92 billion) to 70 billion euros a year in revenue from companies that shop the world for tax bargains, according to the bloc.

The EU Parliament has a separate inquiry committee examining sweetheart tax deals in Europe. That panel was established after revelations in 2014 of Luxembourg's fiscal accords with companies including Amazon.com Inc. and McDonald's Corp.

BLOOMBERG