The European Commission has not ruled out tightening tax loopholes and transparency gaps such as those found in Luxembourg.
The comments on Monday (8 February) follow the publication of an investigation disclosing how the Italian mafia, moguls and billionaires continue to park their wealth in the Grand Duchy, along with some 55,000 offshore companies managing assets worth at least €6 trillion.
“These investigations do provide important information for us, and perhaps there will need to be some changes,” said commission spokesperson, Marta Wieczorek.
“They show us what the shortcomings in the system may well be,” she added, noting that there are a battery of rules in place to tackle tax evasion and aggressive tax avoidance.
Eric Mamer, the EU commission’s chief spokesperson, also weighed in.
“I don’t think we are in a position to tell you what exactly are the lessons to be learned already now,” he told reporters.
“Let’s see what comes out and the commission will as always digest the information and see what consequences can be drawn from it,” he said.
The latest revelations about Luxembourg, spearheaded by the French Le Monde newspaper, comes from publicly-available but difficult-to-access data.
The first in a series of investigative articles, published Monday, have so far shown companies set up in Luxembourg are linked to Italian Mafia, the’Ndrangheta and the Russian underworld.
It also found that Italy’s far-right League party has stashed money in the country, in an effort to conceal it from the Italian authorities.
Le Monde was able to scrape the data of 124,000 commercial companies registered in Luxembourg with the aim of trying to figure out who owns each one.
Those firms belong to some 157 nationalities, of which most are French.
“It’s almost as if Luxembourg owned small pieces of France,” noted Le Monde.
The data, coined OpenLux, was then shared with journalists at the Organized Crime and Corruption Reporting Project.
The Suddeutsche Zeitung in Germany, Le Soir in Belgium, McClatchy in the United States, Woxx in Luxembourg, IrpiMedia in Italy also worked on it.
Together they identified 64,458 beneficiaries.
But they also found that approximately 80 percent of the 15,000 investment funds in Luxembourg did not declare their beneficial owners. Almost 5,000 of those funds are German.
Such broad information was taken from the Luxembourg trade register website, but requires a small payment for each query.
And there is no possibility to search using a person’s name, rendering the tool almost useless when attempting to find who owns a firm.
“What makes OpenLux so striking is that it’s not a leak from a shady service provider, but a deep dive into public government data that had been made unwieldy to connect dots with,” said Markus Meinzer from the NGO Tax Justice Network, in a statement.
The NGO describes Luxembourg as world’s sixth-greatest enabler both of financial secrecy and of corporate tax abuse. Some €23bn is lost in tax every year globally due to Luxembourg, it says.
Luxembourg put online the data in late 2019, following an EU directive. It was, in fact, among the first EU member states to do so – a move praised by transparency campaigners.
“The weakness of the transparency register lies in its piecemeal implementation,” said German Green MEP, Sven Giegold.
He said the commission needs to launch legal battles against EU states that have spotty transparency registers.
For its part, the Luxembourg government has rejected the findings.
