European states urge G-20 to share data on offshore accounts

AP News
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Posted: Apr 15, 2016 5:43 AM
European states urge G-20 to share data on offshore accounts

MADRID (AP) — The European Union's five biggest economies, including Germany and Britain, have agreed to share information on company ownership and are urging other nations to do the same to make it harder for criminals and tax cheats to avoid the law.

The move announced late Thursday comes as the leak of the so-called Panama Papers claimed another political casualty: Spain's acting industry minister resigned after his name was linked to offshore companies. Iceland's prime minister was forced to resign earlier this month as a result of the leak.

Britain's Treasury chief George Osborne and his counterparts in Germany, France, Italy and Spain have agreed to share information on the beneficial ownership of companies. In addition, they have written to other leaders of the Group of 20 most advanced economies, urging progress toward a global information exchange that will "lift the veil of secrecy" that criminals hide under. Osborne described the deal as a breakthrough.

"It shows the benefit of working together," he said. "No single country can tackle international tax evasion alone."

The leak of documents from a Panama-based law firm have placed tax evasion at the top of the international agenda by disclosing how the elite use shell companies to dodge financial obligations. It has sent off reverberations globally, forcing unprecedented disclosures by political leaders such as U.K. Prime Minister David Cameron, who released his tax returns for the first time after questions about his family's affairs.

The European leaders are urging tax and law enforcement agencies to exchange information regarding beneficial ownership registers, and new registers of trusts. The letter comes as the ministers attend an International Monetary Fund meeting in Washington.

"It's a good first step," Meg Hillier, who chairs the Commons Public Accounts Committee, told the BBC. "One hammer blow doesn't crack a nut but it's a great start."

In Spain, Jose Manuel Soria's resignation from Parliament and his ministerial posts Friday came days before he was due to appear in Parliament to explain his claim that he never ran or owned a Bahamian offshore company, although his name appeared on leaked documents identifying him as director of a firm.

Spain's El Confidencial digital news site this week published a September 1992 document naming him and another man as one of two directors of a company named U.K. Lines Ltd.

Soria, who also held the energy and tourism portfolios, told reporters Monday he never "had shares, nor participation, nor any position of responsibility" with the company. He said a British company with that name was a service provider for a family shipping business he used to run.

Later, apparent contradictions in his explanations and further reports that he allegedly had an offshore company in Jersey led to increased calls from opposition parties for his resignation.

In a statement, Soria said he was resigning "in light of the succession of mistakes committed over the past few days" in explaining his business activities prior to entering politics, mistakes he said were due to "the lack of precise information concerning things that happened more than 20 years ago."

He said that although the activities had no relation with his political duties, the obvious harm it was causing the government and his party at such a critical moment led him to take the decision.

Soria, 58, was named minister after the Popular party won a landslide victory in 2011. The party has been running a caretaker government under acting Prime Minister Mariano Rajoy since a Dec. 20 inconclusive election.

Several other prominent people in Spain have been named in the offshore leaks, including Barcelona soccer start Lionel Messi and film director Pedro Almodovar.

The governing Popular Party has been linked to myriad corruption scandals in recent years. Soria was the second Rajoy minister linked to corruption scandals to resign following that of former Health Minister Ana Mato in 2014. Former Justice Minister Alberto Ruiz Gallardon in 2014 after he failed to get a planned restrictive abortion law passed.

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Danica Kirka contributed from London.