An official European probe has been launched into the scandal over the so-called Panama Papers.
The European Parliament has agreed to set up an inquiry into what it calls “alleged contraventions and maladministration” in the application of EU laws on money laundering, tax avoidance and tax evasion.
The vote to hold an inquiry was held in a plenary session of the parliament on Wednesday.
The Panama Papers uncovered 11.5 million documents revealing details of offshore accounts and tax arrangements.
The probe will be into the actions or lack of action by the European Commission and public administrative bodies of EU member states.
Sven Giegold, a German Green MEP, told Euronews: “We have to research how it was possible to break European anti-money laundering legislation in Europe systematically.
“Because what the journalists have uncovered is that it was possible to open bank accounts and secretive companies and disguise the real beneficial owners of large amounts of money.”
The inquiry committee will have 65 members and will report back in one year.
The setting up of the probe came after an agreement was reached by the European Parliament’s Conference of Presidents of political groups.
Details of the mandate of the inquiry had to be agreed by the various political groups.
A detailed statement within the mandate declares: “In times when the European Union is still coping with the consequences of the crisis from the end 2000s, European institutions have a duty to ensure that the fight against tax fraud, avoidance and illegal activities is given priority and has the best legislative framework possible”.
Some reports say the inquiry may call ministers to give evidence before the committee, as well as tax officials and bank bosses.
Some MEPs and political groups are even calling for the Panamanian government and the Panama-based Mossack Fonseca law firm to testify in the EU parliament .
The European Parliament estimates that tax evasion and avoidance costs the EU between 50 and 70 billion euros a year.
The European People’s Party (EPP) group in the parliament is calling for a register of company owners in the EU.
EPP MEP Burkhard Balz, who led negotiations on the setting up of the inquiry committee, said: “We want to systematically end secrecy on who owns letter box companies.
EPPGroup</a> wants to end secrecy about who owns companies <a href="https://twitter.com/hashtag/Balz?src=hash">#Balz</a> <a href="https://t.co/7jsFc5WkTa">https://t.co/7jsFc5WkTa</a></p>— EPP Group (EPPGroup) June 8, 2016
“Nobody can explain why it should be a secret who owns a company. If somebody founds a company – be it in Europe, Panama or elsewhere – there must be no secrecy about it. A real entrepreneur is not ashamed of what he does,” said Balz.
“I am happy that we have a broad cross-party consensus on the basis of my proposal. We want the committee to inquire into the inaction of Member States which led to what the Panama Papers revealed.
“And we also want to shed light on structural problems which make it so difficult to tackle the problem. Very often it is national egoism which paralyses international action against tax dodging and tax avoidance.”
The Socialists and Democrats (S&D) political grouping in the European Parliament says EU countries lose between 100 and 240 billion euros in taxes every year because of “aggressive corporate tax planning”.
The group highlighted a series of new measures aimed at fighting tax evasion.
MEP Hugues Bayet said: “By endorsing the principle that taxes must be paid where profits are made, we are sending a clear signal to EU member states about the need for ambitious progress to fight tax evasion.
“We do not want this Europe of two halves with on the one side the vast majority of citizens who pay their taxes honestly and on the other these economic giants who manage to avoid paying their contribution.
“It’s time that everyone contributed in the same way to financing healthcare, jobs for young people, schools and universities, housing and security. Big corporations must not be allowed to opt out of the collective effort simply because they have the means to pay financial and tax specialists whose sole mission is to find creative ways to avoid taxes – specialists whose pay is determined by the sums they divert from the public purse.”
The co-president of the Greens/ European Free Alliance in the European Parliament, Philippe Lamberts, said: “Setting up an inquiry has been a priority for our group and we welcome the willingness of other political groups to treat the Panama Papers revelations with the seriousness they deserve and work swiftly to create such an inquiry.
“It is clear existing EU rules against money laundering are not being properly enforced and that the EU institutions, governments and authorities have failed in their duties to this end. It is necessary to carry out a comprehensive investigation to ensure the proper consequences follow at EU level.
“As the EU’s democratically-elected institution, the European Parliament has a duty to investigate the extent and implications of these allegations, and the inquiry must get underway without delay.”
The inquiry is expected to hold its first meeting before the summer break.
The actual make-up of the committee has yet to be decided.