Sven Giegold: Global tax cooperation remains crucial

German Greens MEP Sven Giegold says that lack of effective action by the US is “damaging the global fight against financial and tax crimes.”

Sven Giegold | Photo credit: European Parliament audiovisual

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

19 Jul 2018

Giegold is a member of a parliamentary delegation which has just concluded a fact finding trip to Washington on what the US is doing to combat financial crime.

The delegation from the economic and monetary affairs committee was in Washington and New York to meet representatives from the US Treasury, the Institute of International Bankers (IIB) and the Federal Reserve Board (FRB).

During the three-day trip, which ended on Wednesday, the delegation also discussed transatlantic relations, developments in the field of financial market regulations and taxation, the impact of the US tax reform on financial institutions and regulatory challenges for foreign banks in the US.

Giegold, a member of the Greens/EFA group, said the trip was a chance to discuss the fight against money laundering, tax crimes and aggressive tax avoidance.

He said he had joined other members of the Parliament’s committee on financial crimes, tax evasion and tax avoidance in meeting high level interlocutors including members of Congress, members of the US departments of Justice and Treasury, the World Bank, Apple, the anti-financial crime body FinCen, the IMF ICIJ journalists and the FACT coalition.

He said, “The United States has been spearheading the fight against global financial crime. It was America that led the successful clampdown against the misuse of banking secrecy for tax evasion. It was America that led to the recent closure of European banks involved in money laundering scandals such as the Latvian ABLV and the Maltese Pilatus Bank.“

But he went on, “It is somewhat embarrassing that the United States have to serve as a de facto anti-money laundering authority in the EU. At the same time it is critical that our American partners keep up the spirit by applying the same standards to their own financial institutions.

“It is disappointing that it is still possible to open de facto anonymous bank accounts in many US states (see our study below) damaging the global fight against financial and tax crimes. It is equally important that multinational corporations are paying their fair share of tax regardless where they do business or where they come from.

“Therefore, global tax cooperation remains crucial rather than a spiral of tax competition and new tax subsidies “

He also pointed to a Greens report on “the role of the US as a tax haven.”

The report states that, “The US has refused to join the trend for multilateral automatic exchange of information. Instead, it will implement its domestic law called the Foreign Account Tax Compliance Act (FATCA) and the related Inter-Governmental Agreements signed with other countries. However, these involve unequal exchanges of information: the US receives more information than what it sends (for example, about beneficial ownership data). Oddly, though, the OECD did not include the US among jurisdictions that did not commit to its new standard.”

It adds, “The European Union should consider including the U.S. in the upcoming list of tax havens, unless it effectively ensures registration of beneficial ownership information for companies and commits to equal levels of automatic exchange of information with European Union countries.”

Read the most recent articles written by Martin Banks - New EU regulations on AI seek to ban mass and indiscriminate surveillance


Industry & Finance
Share this page