A European Commission spokesperson believes it is too early for them to comment on the Konrad Mizzi and Panama Papers situation, however said it will take action if EU laws were broken.

This newsroom sent a number of questions to different EU institutions, asking questions related to Energy and Health Minister Konrad Mizzi, who was mentioned in the Panama Papers, and whether they feel comfortable with an EU Minister being mentioned in the papers, along with other questions.

Energy Minister Konrad Mizzi has been at the centre of the local angle in a worldwide storm, where several politically exposed persons have been outed for having companies in a number of secretive jurisdictions. The company at the centre of it all is Mossack Fonseca, a legal firm from which all the files were leaked.

Questions sent to the EU Commission directed at European Commissioner for Health Vytenis Andriukaitis, asked whether he was comfortable with a Maltese Health Minister being mentioned in the Panama Papers and whether he felt Minister Mizzi should resign.

In response, a European Commission spokesperson for Financial Services and Capital Markets Union, Taxation and Customs responded. With regards to the specific case, the spokesperson said that it is still “too early for us to comment. If these leaks reveal that EU laws have been broken or point to loopholes or weaknesses in our legislation, the Commission will of course take action, provided this falls under its competence”.

He explained however, that the “Panama Papers vindicates this Commission's efforts to fight tax avoidance and shows the need to go full throttle in pursuing this agenda”.

Tax avoidance

“In terms of tackling the scourge of tax avoidance, Commissioner Margrethe Vestager (European Commissioner for Competition) has launched a raft of state aid investigations against corporates in Europe”. 

This Commission has already made giant strides towards greater tax transparency, the spokesperson said. “We now have a landmark agreement in the EU on sharing information on tax rulings, which no one thought possible when we made our proposal. We have a political deal on country-by-country reporting, and financial and tax transparency deals with third countries”. 

“We were the first to shine a light on non-cooperative tax jurisdictions already last year, with our map of third-countries that don’t abide by international tax standards. Panama is on that list. Our push to have a common EU approach to listing third-countries has been borne out”.

“In terms of combating money laundering and bringing about more corporate transparency, we are also amending and reinforcing the Anti-Money Laundering legislation”.

“Thanks to the Panama Papers, we now have even more momentum to drive forward our far-reaching tax agenda”.

Due diligence

The response also included some background notes. Under the current Anti-Money Laundering Directive, EU banks have to perform thorough customer due diligence, including as regards the beneficial owners of clients. If they detect anything suspicious, they have to report this to the financial intelligence units.

There is also obligation to report suspicious transactions and maintain records of payments. Businesses subject to the rules will also have to install internal controls to combat money laundering and terrorist financing activities under the framework.

It is a matter for national authorities to investigate whether there has been any misconduct at the level of individual banks and whether banks have been giving illegal advice to clients.

The fourth Anti Money-Laundering Directive (AMLD) goes further, and the Commission is pushing for Member States to transpose these rules as quickly as possible. (Formally, Member States have until June 2017, but the Commission has been calling for quick implementation).

As part of the fourth AML Directive, the Commission expects Member States to put in place central registers on beneficial ownership of all EU companies as quickly

This is already an obligation under EU law since May 2015 and the Commission has consistently pushed for quick implementation. Member States have already committed to speed up the overall transposition process of the fourth AML - they should follow up on this commitment.

Acting with duplicity

Sergei Dmitrievich Stanishev, leader of the European political party called the Party of European Socialists (PES), of which the Maltese Labour Party falls under and forms part of the S&D European Parliament Political Group was also contacted.

Mr Stanishev had previously said about the Panama Papers: “these papers reveal criminality of the rich on a previously unseen scale. The money that these people were hiding does not belong to them - it should have been redistributed for the benefit of all. But they chose to act with duplicity, and thinking that their money put them beyond reproach they neglected their responsibilities towards society. I commend the work of the International Consortium of Investigative Journalists (ICIJ) which has brought this corruption to light.”

It was brought to his attention that Energy Minister Konrad Mizzi was on that list, and he was asked by this newsroom whether he felt comfortable that Minister Mizzi is part of PES, whether PES would distance itself from him and whether he felt the Minister should resign.

A spokesperson for PES said the following: “Whilst PES thinks that it wouldn’t be appropriate to comment on this case pending ongoing investigations, the PES welcomes the fact that Dr Mizzi has requested that the Maltese Tax Commissioner investigates all of his accounts and to subject himself for a full independent tax audit”.

The PES also welcomed Prime Minister’s Muscat “strong stance on the issue, and his commitment to ask for Dr Mizzi’s resignation if any illegalities are found”.

“Our political family’s position on tax evasion could not be clearer – it is a basic obligation that nobody should be able to escape - and we have long campaigned to make taxation fairer, fight tax fraud and tax evasion”.

Jeppe Tranholm-Mikkelsen, Secretary-General of the Council of the European Union, was also contacted, however chose not to comment. “Please understand that we do not comment the Panama Papers”.

The European Court of Auditors said: “The ECA has no reaction to the matter you raised.”