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German Finance Minister Suggests Plan to Combat Tax Havens

April 10, 2016, 8:18 PM UTC
PANAMA-PAPERS-MOSSACK-FONSECA
View of a sign outside the building where Panama-based Mossack Fonseca law firm offices are in Panama City, on April 4, 2016. A massive leak -coming from Mossack Fonseca- of 11.5 million tax documents on Sunday exposed the secret offshore dealings of aides to Russian president Vladimir Putin, world leaders and celebrities including Barcelona forward Lionel Messi. An investigation into the documents by more than 100 media groups, described as one of the largest such probes in history, revealed the hidden offshore dealings in the assets of around 140 political figures -- including 12 current or former heads of states. AFP PHOTO/ Rodrigo ARANGUA / AFP / RODRIGO ARANGUA (Photo credit should read RODRIGO ARANGUA/AFP/Getty Images)
Photograph by Rodrigo Arangua AFP/Getty Images

German Finance Minister Wolfgang Schaeuble gave details of a plan on Sunday to combat tax havens, including creating company registers that list the names of company owners and changing the start date of the statute of limitations for tax offenses.

A huge leak of documents from Panama-based law firm Mossack Fonseca has shown how offshore firms are used to stash the wealth of the rich and powerful in an embarrassment for several world leaders.

Schaeuble said on German public broadcaster ARD that if company registers listing the owners of offshore firms were networked internationally, it would be possible to find all of the people behind these companies.

In the European Union such registers were already agreed as part of a fourth directive on money laundering that must be implemented at the national level by mid-2017.

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Schaeuble also pointed to an agreement on automatically swapping tax information which around 100 countries have now joined. It is due to come into effect in 2017. He said the Panama Papers ratcheted up the pressure on others to join.

“Now it’s increasing the pressure on those who aren’t yet taking part to take part such as the USA,” he said.

Schaeuble also said the statute of limitations for tax offenses should, in future, only start once a taxpayer has fulfilled his or her obligation to provide information.

He also wants to put countries like Panama and other tax havens on a “blacklist” if they do not take part in the automatic exchange of data, which would mean that certain financial transactions with these countries are no longer allowed.

Banking watchdogs across Europe have begun checking whether lenders have ties to the Panama Papers but Schaeuble said German banks had “largely put things in order already” and stressed: “We have made a lot of progress in recent years.”