EU mulls crackdown on banks offshore tax advisers after Panama Papers

BRUSSELS (Reuters) - European Union countries should consider taking tougher measures against banks and tax advisers who help their clients to hide money offshore, an EU Commission paper says.

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, in this file picture taken October 28, 2015. REUTERS/Francois Lenoir/Files

The document will be discussed at a meeting of EU finance ministers in Amsterdam on April 22-23, where tax evasion has been added to the agenda following the Panama Papers leaks.

“The Panama Papers have highlighted how certain European financial intermediaries and other providers of tax advice appear to have actively helped their clients to conceal money offshore,” the document, seen by Reuters, said.

Banks are already subject to financial sanctions and a possible withdrawal of their operating licenses if they breach EU anti-money laundering rules.

The Commission wants finance ministers to consider “more effective disincentives” for lenders and other tax advisers who assist in tax evasion schemes, the document said.

The EU executive is reviewing anti-money laundering rules and is expected to make legislative proposals by June.

Under consideration are also plans to increase transparency on the ultimate “beneficial” owners of companies and trusts, which often are hidden, thus allowing tax evasion.

Current rules oblige EU states to set up registers of firms’ owners, but do not require public disclosures. Trusts are at the moment subject to lower transparency requirements.

“It would be worth considering whether improvements are possible to enhance accessibility of beneficial ownership registers, to clarify the registration requirements for trusts,” the EU Commission paper said.

The Commission this year proposed measures to tackle tax dodging, urged large companies to reveal their tax data and called for a EU list of tax havens which should be subject to common sanctions.

Commission Vice President Valdis Dombrovskis called on EU states to make “substantive progress” on all these issues in a letter sent to the Dutch presidency of the EU ahead of the Amsterdam finance ministers’ meeting.

Reporting by Francesco Guarascio; Editing by Richard Balmforth