France urges Panama to respond to its requests for information

Fight against corruption and tax evasion/Panama Papers – Communiqué issued by the Ministry of Finance and Public Accounts

Paris, 11 April 2016

Given the Panama Papers revelations, France reiterates its commitment to spearheading the battle against all forms of evasion, avoidance and aggressive tax optimization. It has been taking this action resolutely since 2012 at national level and in every European and international forum. In this context, Michel Sapin, Minister of Finance and Public Accounts, recalls the proposals which France has drawn up and will promote at the spring meetings in Washington this week (G20 and IMF).

1) France will ask Panama, which it has just included on the list of non-cooperative states and territories, to provide it with full financial information relating to French taxpayers linked to Panama. To this end, it will request a renegotiation of its tax agreement with Panama.

2) In addition to the 96 countries already committed, France calls on all countries to subscribe to the agreement signed in Berlin in October 2014 for the Automatic Exchange of Information between tax authorities, due to come into force in 2018 at the latest.

3) France would like an agreement at G20 level on the creation of a blacklist enabling fiscally non-cooperative jurisdictions to be identified on the basis of assessments by the Global Forum on Transparency and Exchange of Information [for Tax Purposes] and counter-measures coordinated between the various states to be applied to them.

4) The European Union must adopt a driving role in the implementation of such a mechanism, by means of a directive providing for a set of common deterrent measures against states and territories identified as non-cooperative at international level – measures whose implementation would be compulsory in the 28 member states.

5) At European level, France is calling for a strengthening of cooperation between supervisory authorities in the financial sector on the fight against money laundering and terrorism financing, to ensure full access to information, for example access by the supervisor of a banking group’s parent company to data from a subsidiary or branch established in another EU country.

6) France would like all countries to create uniform registers of real beneficiaries, including legal persons or entities of all kinds (stock companies, trusts, foundations etc.).

7) France calls on the OECD to work with the FATF [Financial Action Task Force] to create a benchmark for automatic information exchange on the identity of those beneficiaries.

8) France will publicize its register of the real beneficiaries of trusts and is in favour of all countries doing the same.

9) France calls on the OECD and the FATF to ensure that all intermediaries in international financial arrangements are under a practical obligation to be vigilant on tax and money laundering.

10) France would like the European Union to look at the possibility of increasing the effectiveness of sanctions against intermediaries who promote and encourage tax avoidance.

11) Moreover, France confirms its wish for all G20 and OECD states to consistently implement the 15 BEPS Actions covering the whole of international taxation.

12) France would also like to ensure the global implementation of the automatic exchange of country-by-country reports (CBCRs) so that all states can have an overall view of the multinationals on their territory, their constituent entities, their locations, the nature and scope of their activities and their tax burden for accounting periods beginning in 2016.

13) Finally, France supports the establishment at European level of an obligation for big companies to make public their activities and taxes on a country-by-country basis, the so-called “public CBCR”. The European Commission is due to make a proposal along these lines tomorrow./.

Fight against corruption and tax evasion/Panama Papers – Conversation between M. François Hollande, President of the Republic, and his Panamanian counterpart – Communiqué issued by the Presidency of the Republic

Paris, 8 April 2016

François Hollande spoke to Mr Juan Carlos Varela, President of Panama.

He explained to him the reasons justifying Panama’s inclusion again on France’s list of non-cooperative states and territories.

The French President urged Panama to respond to the French tax authorities’ requests for information.

He also confirmed that France had asked for a meeting of high-level OECD experts to be held next week in order to work on coordinated action by tax authorities following the information revealed in the international press.

Finally, on a more global level, the French President insisted on countries honouring the commitments they made to move as quickly as possible to automatic information exchange between tax authorities./.

Fight against corruption and tax evasion/Panama Papers – Communiqué issued by the Ministry of Finance and Public Accounts

Paris, 8 April 2016

By an order signed today, Friday 8 April 2016, Michel Sapin, Minister of Finance and Public Accounts, and Christian Eckert, Minister of State for the Budget, added Panama to the 2016 list of non-cooperative states and territories, after seeking the opinion of Jean-Marc Ayrault, Minister of Foreign Affairs and International Development.

This text aims to guarantee that our partners actually apply the tax cooperation commitments made to France, with due regard for international principles. When the list was last updated, on 21 December 2015, it was announced that particular attention would be given to Panama’s actual cooperation. Since then, despite repeated exchanges between the Finance Ministry’s departments and the Panamanian authorities which Michel Sapin highlighted in mid-February during a meeting with his counterpart, Panama is still not passing on to France the information necessary for the implementation of its legislation, in particular the identity of the real beneficiaries and the [economic] substance (profit and loss accounts, staff) of companies registered in Panama. Prohibitive tax measures linked to inclusion on the list will come into force as of 1 January 2017.

As the President announced in a meeting today with the Panamanian President, it is now incumbent upon Panama to embark on actual cooperation with the French authorities, according to the standards set by the OECD. In addition, the President asked Panama to confirm that it will move to the Automatic Exchange of Financial Information on 1 January 2018, in accordance with the terms stipulated by the OECD.

At the Panamanian authorities’ request, Michel Sapin will have a meeting in Paris shortly with his Panamanian counterpart to take stock of all the ongoing requests and ask for full transparency on the situation of all those French nationals implicated in financial relations with Panama.

At the Franco-German Council of Ministers on 7 April 2016, France and Germany reiterated their commitment to spearheading the battle against all forms of evasion, avoidance and aggressive tax optimization. France and Germany called on the international community to work on effective counter-measures to force those jurisdictions which do not play by the collective rules to adopt the common rules. A European list of non-cooperative jurisdictions and territories would be a first step in that direction. A meeting of high-level OECD experts will be held next week, with a view to coordinated action by tax administrations following the information revealed in the international press./.

Fight against tax evasion – Statement by M. François Hollande, President of the Republic

Paris, 4 April 2016

This affair [the Panama Papers] confirms that it’s possible to combat tax evasion, and all the information that is provided will give lead to investigations by the tax services and to judicial proceedings.

For several years we, France, have sought to be in the vanguard of international drives for greater transparency, less tax optimization and the fight against money laundering. We see that as we make progress and sign a number of agreements, there’s the possibility of knowing more about those things.

Even at legislative level, we want to show – it’s the purpose of a text which will come to Parliament very shortly – that France can also be in the lead on transparency and the fight against corruption, including when it comes to protecting whistleblowers. It’s thanks to a whistleblower that we now have this information. Those whistleblowers do useful work for the international community. They take risks, so they must be protected.

But what I can assure you is that as the information becomes known, every investigation will be conducted, every procedure will be carried out, and the trials may take place.

As you know, for several years we’ve been fighting this battle against tax evasion. For 2015 alone, those who had committed fraud were notified [of proceedings relating to] €20 billion so that equivalent sums could be recovered. Of that €20 billion, we’ve already taken back €12 billion. So, if I may say so, it’s good news that we’re aware of those revelations, because it will bring in more tax receipts from those who have committed fraud.

So I thank the whistleblowers. I thank the press, which has played an active role. And I have no doubt that our investigators are fully ready to look into these issues, these dossiers and these cases, first of all for the sake of what we consider to be morality and also for the sake of our public finances. Thank you./.

Published on 19/04/2016

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