Issue link: https://maltatoday.uberflip.com/i/770367
maltatoday, SUNDAY, 8 JANUARY 2017 12 PANAMA PAPERS Expert: Panama MEPs should focus money laundering rules breach MAT THEW VELLA A preparatory document for MEPs of the Panama Papers committee of inquiry has sug- gested that the committee's focus should be on the alleged failure of the European Commis- sion to enforce – and of Member States to implement and to en- force effectively – anti-money laundering rules, and taxation and auditing directives. The document was prepared for the Pana committee, set-up to investigate alleged contra- ventions and maladministration in the application of EU law in relation to money laundering, tax avoidance and tax evasion – specifically the 2005 directive on the prevention of the use of the financial system for the purpose of money laundering and terror- ist financing (AMLD III). In April 2016, the Internation- al Consortium of Investigative Journalists revealed over 214,000 offshore entities, connected to people in more than 200 coun- tries and territories, including EU member state Malta – among whom were minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri. MEPs from the committee are scheduled to visit Malta to speak to experts and civil society on the ramifications of the Panama leaks. According to the document's author, Prof. Robby Houben of the University of Antwerp, EU banks, tax advi- sors, lawyers and middle- men who set up offshore c o m p a n i e s and bank ac- counts, were negligent in performing en- hanced due dili- gence measures on their clients, both at the es- tablishment of the business re- lationship with them and dur- ing that busi- ness relation- ship, even when there was a sus- picion of money laundering or terrorist financ- ing. Prof. Houben said that no or insufficient re- search was done to identify the beneficial own- ers of the off- shore entities, to understand the ownership and control structure of the cus- tomer or to obtain information on the purpose and intended na- ture of the business relationship. "Allegedly, this relates both to politically exposed persons and others," Prof. Houben said, although without specifically referring to any of the EU politi- cians who featured in the Pana- ma leaks. "As a result, no sufficient docu- mentation was gathered for use by the Financial Intelligence Unit or by other competent au- thorities in accordance with national law in any investiga- tion into, or analysis of, possible money laundering or terrorist financing… "In addition and more in gen- eral, allegedly, the banks, tax advisors, lawyers… did not pay sufficient special attention to this, whereas they should have, because offshores by their na- ture favour anonymity and are particularly likely to be related to money laundering or terrorist financing." Prof. Houben said that in some instances, tax or other adminis- trations or supervisory bodies discovered the existence of the offshore constructions, but this was not adequately reported to the FIU. An audit by the Inland Revenue Department is still taking place into the offshore structure set up for Konrad Mizzi, formerly the minister for energy, by Mossack Fonseca, the Panamanian law firm whose records were leaked to the ICIJ. A separate, external audit by a Big Four firm in London is also taking place, although its con- tents are as yet unknown. Mizzi set up an offshore company in Panama, with a corresponding offshore trust in New Zealand, but never notified the IRD of the company. A total of 55 people are said Understanding the Right to Legal Assistance in Malta: Access to a Lawyer, Legal Aid and Pro Bono The Battenberg Suite, Osborne Hotel, Valletta | Friday 13th January 2017 | 10am – 5pm This one day seminar is aimed at lawyers interested in the right of access to legal assistance and legal aid as a crucial element of the right to a fair trial. The event will look at: v Access to legal aid as an essential precondition for the exercise of the right to a fair trial: the European Roadmap; v The right of access to a lawyer: European Court of Human Rights; v The Maltese legal aid system: current legislation and possible reforms; v The pro bono legal assistance: a commitment to an effective and accessible legal aid system. Speakers: • Tzeni Varfi, Legal and Policy Officer, Fair Trials International • Jodie Blackstock, Legal Director, JUSTICE • Ann Spiteri, Lawyer, LEAP (Legal Expert Advisory Panel) Expert • Marieanne McKeown, Director of Global Pro Bono, PILnet This is a free event | Limited places | Lunch will be provided | For more information email Alessia alessiacicatiello@aditus.org.mt The project is funded through the Voluntary Organisa7ons Project Scheme, managed by the Ministry for Social Dialogue, Consumer Affairs and Civil Liber7es Two confidence motions filed against Konrad Mizzi (above) and Keith Schembri (right), both defeated, but no discussion at committee level analyzing effects of Panama Papers on tax laws or tax avoidance Prof. Robby Houben of the University of Antwerp said tax advisors, lawyers and middlemen who set up offshore companies were negligent in performing enhanced due diligence measures on their clients