On the second anniversary of the Panama Papers and in the wake of the European Commission’s latest communication on EU anti-tax avoidance requirements on financing and investment operations, a new report by Counter Balance calls on the European Investment Bank (EIB) to develop a responsible policy and 'show the way' in the fight against tax evasion and avoidance.
In recent years, numerous scandals have largely exposed the magnitude of tax evasion and tax avoidance taking place at international level. As a result, a real political momentum for tax justice has built up: at European level, this has translated in a strong push from the European Commission to develop of a set of initiatives to fight aggressive tax planning, including the publication of an official EU Blacklist.
But it is now high time that the European Union translates these political priorities in all its fields of operations. For consistency’s sake, it should therefore ensure that its own financial arm – the EIB – also plays a leading role in the field of fair taxation, says a new report by Counter Balance released today.
The study has a twofold purpose: on the one hand it shows the urgency of a serious commitment by the EIB to pro-actively fight tax evasion and tax avoidance, on the other, it formulates key recommendations for the ongoing revision of the EIB’s tax havens policy.
Indeed, the 'Interim approach to the EIB Policy towards weakly regulated, non-transparent and uncooperative jurisdictions – NCJ' adopted by the bank in 2017 in consequence of the pressure by the fellow EU institutions is clearly just a first step towards a more complete reshaping of the bank’s approach to the issue. And the 2018 revision of the EIB NCJ Policy, following the adoption of the EU list of non-cooperative jurisdictions by European member states, is an essential opportunity for the bank to clean up its act.
Referring to some of the key recommendations highlighted in the report, Xavier Sol, Director of Counter Balance said:
“Given its central macroeconomic role and its nature of 'EU body' and public institution, it is all the more important that the EIB‘s publicly-backed investments and business do not feed the cycle of aggressive tax planning by multinationals but rather grasp the opportunity to push for a new standard of improved transparency and tax-responsible practices. An essential step in this direction would be to require Country by Country reporting to all its business clients.”
He went on claiming: “A responsible taxation policy at the EIB could create a leverage effect on other International Financial Institutions (IFIs) and inspire them to move in that direction. The EU’s bank shouldn’t miss this opportunity.”