The European Parliament's Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) held its second hearing today alongside representatives from the UN, the OECD, the European Banking Authority (EBA) and the European Commission.

Amongst the issues discussed were the existing limitations and constraints on supranational institutions with regards to recommending or settling international rules, and why they have been ineffective in preventing money laundering and tax evasion.

German MEP, Fabio De Masi, Vice-President of PANA, started off by questioning the assessment of the situation offered by Daniel Thelesklaf, President of the Committee on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL):

“I don’t entirely agree with Mr Thelesklaf when he said that in many cases, these shell companies are being used for legal reasons. When the US Senate looked into what roles the banks played in offshore activities, they replied that in most cases these were used for illicit purposes.”

“We don’t have a single repository of this information!” retorted De Masi.

When it came to Isabelle Vaillant – the Director of Regulations at the European Banking Authority (EBA) – De Masi expressed concern over the remit of the organisation:

“Is it possible to tell us how many cases you’ve followed based on the Panama leaks?”

Vaillant was initially evasive before finally admitting that the EBA does not have the powers to launch investigations unless a third party complains.

Turning to Michael Lennard, UN Chief on International Tax Cooperation, De Masi concentrated on the issue of country-by-country reporting (CbC):

“When the European Union is discussing its CbC reporting and it wants to link it to a blacklist, would you recommend to also put the United States into its blacklist?”

“States like Delaware and Nevada have such lenient tax laws that they are effectively tax havens, so perhaps it’s time we revisit and adjust the blacklist to include sub-federal level jurisdictions?” asked De Masi.