Europe’s Panamas

Critics Blast Anonymous E.U. Companies

Schäuble-Mass Reuters
Finance Minister Wolfgang Schäuble and Justice Minister Heiko Maas opposed the E.U. proposal.
  • Why it matters

    Why it matters

    The European Parliament is weighing the proposal amid increasingly intense opposition, particularly from German politicians outraged over allegations of massive tax evasion Panama.

  • Facts

    Facts

    • E.U. legislation would create single-member private limited liability companies, formally known as Societas Unius Personae, that would shield the identities of their owners.
    • Both the upper and lower houses of German parliament have demanded that Germany’s coalition government stop the E.U. initiative.
    • Buoyed by conservative party support, the proposal has passed the European Parliament’s internal market committee and moved on to the legal affairs committee.
  • Audio

    Audio

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As European politicians race to announce tougher transparency laws in the battle against offshore tax havens around the world, many are dragging their feet when it comes to taking action on their own own shores

In fact, Brussels is considering the creation of a new form of incorporation that would enable secrecy.

A proposal currently under consideration in the European Parliament would create single-member private limited liability companies, formally known as Societas Unius Personae, that would shield the identities of their owners.

The aim of the proposed legislation, European parliamentarians say, is to stimulate cross-border business in the economic bloc, especially for startups and small- to mid-sized companies.

But some policy experts vehemently disagree. Markus Meinzer, a researcher at the Tax Justice Network, called the proposal a “scandal.” Europe, he said, should be fighting secrecy rather than promoting it.

“We are creating a European Panama system,” blasted one government source in Berlin in reference to last week’s release of the politically explosive “Panama Papers.” The leaked documents named numerous prominent European politicians and companies allegedly involved in anonymous offshore banking in the Central American tax shelter.

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