71 Amendments of Alfred SANT related to 2018/2121(INI)
Amendment 33 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Recalls that current international and national tax rules were mostly conceived in the early 20th century; asserts that there is an urgent need for reform of the rules, so that international, EU and national tax systems are fit for the new economic, social and technologic challenges of the 21st century; notes the broad understanding that current tax systems are not equipped to keep up with these developments and ensure that all market participants pay fair taxes; accepts that a problem with existing tax rules and the administrative approaches by which they are being implemented arise from the fact that accounting methods were designed in days when value added in economic systems was mainly attributable to manufacturing activities, while now especially in advanced economies, economic value added is in large part and increasingly, attributable to service activities, as well as latterly to a further fast development of digital services, to account for which there has been little adaptation in the accounting methods that measure and enable the evaluation of such sectors;
Amendment 56 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Welcomes the fact that during its current term the Commission has put forward 22 legislative proposals aimed at closing some of the loopholes, improving the fight against financial crimes and aggressive tax planning, and enhancing tax collection efficiency and tax fairness; calls for the swift adoption of initiatives that have not yet been finalised and for careful monitoring of the implementation to ensure efficiency and proper enforcement, in order to keep pace with the versatility of tax fraud, tax evasion and aggressive tax planning; acknowledges that the full liberalisation of capital flows on a global scale has opened up the international financial system to large scale attempts at tax evasion, avoidance, ATP and money laundering, but accepts that there is no appetite fora reintroduction of capital controls at a national or EU level, even if this would counter head on most prevalent tax abuses;
Amendment 96 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Recalls that the fight against tax evasion and fraud tackles illegal acts, whereas the fight against tax avoidance addresses situations that are a priori within the limits of the law but against its spirit; notes however that it is completely legitimate within a globally liberalised financial system for corporations (and individuals) to seek to minimise their tax dues over their global commitments, so long as they fully observe all relevant laws and regulations, which clearly can and should be amended progressively by relevant authorities to ensure that all tax dues are fully identified and really being paid and not evaded;
Amendment 104 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Recalls that ATP describes the setting of a tax design aimed at reducing tax liability by using the technicalities of a tax system or of mismatches between two or more tax systems that go against the spirit of the law; but realizes that the concept has also been used too broadly in ways that make it less than meaningful to localise convincingly illegal forms of tax evasion and potentially illegitimate tax avoidance;
Amendment 116 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Calls therefore on the Commission and the Council to propose and adopt a comprehensive definition of aggressive tax planning indicators, building on both the hallmarks identified in the fifth review of the Directive on administrative cooperation (DAC6)26 and the Commission’s relevant studies and recommendations27 ; recommends that all such indicators clearly delineate what is legitimate or not, as well as what could be illegal or not, in the natural efforts by corporation decision makers to minimise the tax liability of their corporation in its worldwide exposure, so as to maximise the returns of its shareholders; stresses equally that the chosen indicators should not be rigidly cast so that they end up as one-size-fits-all measures and check lists, but take into account industry-specific, country-specific and region-specific parameters that define how national taxation laws are framed; calls on Member States to use those indicators transparently as a basis to repeal all harmful tax practices deriving from existing tax loopholes; _________________ 26 Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, OJ L 139, 5.6.2018, p. 1. 27 https://ec.europa.eu/taxation_customs/sites/ taxation/files/resources/documents/taxation /gen_info/economic_analysis/tax_papers/ta xation_paper_61.pdfand https://ec.europa.eu/taxation_customs/sites/ taxation/files/tax_policies_survey_2017.pd f
Amendment 122 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Stresses the similarity between corporate tax payers and high-net-worth individuals in the use of corporate structures and similar structures such as trusts and offshore locations for the purpose of ATP; recalls the role of intermediaries in setting up such schemes; understands however that motivations for these two kinds of players in the taxation matrix can be totally disparate, so that while corporate aims will be guided by the urge to increase retained earnings within the corporate entity, high net worth individuals will be targeting a consolidation of wealth accumulation by self, family and personal dependents;
Amendment 129 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Welcomes the Commission’s assessment and inclusion of ATP indicators in its 2018 European Semester country reports; calls for such assessment to become a regular feature in order to ensure a level playing field in the EU internal market, as well as the greater stability of public revenue in the long run; requests that every year, the Commission includes in its European Semester country reports a short evaluation of how the assessment procedure including ATP indicators is shaping up and how it can be improved;
Amendment 154 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Recalls that taxes must be paid in the jurisdictions where the actual economic activity and value creation takes place or, in case of indirect taxation, where consumption takes place; recognizes however that in a continually evolving digital economy where marketable output becomes the sum of a jigsaw of cross- border inputs for which current accounting models to measure how and where value is being added are hugely complex or inoperative, rigid, one-size- fits-all methods to measure value creation can become counter-productive; understands that the same consideration applies to digital cross-border consumption;
Amendment 168 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Takes note of the statement made by the French Finance Minister at the TAX3 meeting of 23 October 2018 regarding the need to discuss the concept of minimum taxation; welcomes the readiness by France to include the debate on minimum taxation as one of the priorities of its G7 Presidency in 2019; points out however that the concept of minimum taxation could lead to a race to “the top” as contrasted to a race to “the bottom”, which would force Member States running lean tax systems to load up their tax schedules, to the benefit of Member States, such as France, which by running high taxation, high public expenditure administrative systems render their economies less competitive in the Single market compared to those Member States that run leaner tax systems and have leaner and more efficient public expenditure commitments;
Amendment 171 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16 a. Notes moreover that within the Eurozone as well as under Maastricht budgetary rules, Member States are obligated to follow deficit and national debt operational criteria sufficiently rigorous such that the imposition of any new “minimum” rules on taxation levels within government budgets could appear to be, and quite likely will be, vexatious, over intrusive, not fit for purpose and in the end helpful only to states that give low priority to increasing the tax burden on their polities;
Amendment 181 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Notes that an exit tax was adopted by the EU in ATAD I, allowing Member States to tax the economic value of capital gain created in its territory even when that gain has not yet been realised at the time of exit; considers that the principle of taxing profits made in Member States before they leave the Union should be strengthened, for example through coordinated withholding taxes on interests and royalties; calls on the Council to resume negotiations on the interest and royalties proposal28 ; insists however that such measures should not apply on a one size fits all basis, that they should be proportional to the tasks at hand and that the manner by which they are established and implemented are totally transparent as well as subject to quick recall when it is found that they are not fulfilling the aims that led to their establishment; _________________ 28 Proposal for a Council directive of 11 November 2011 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States, COM(2011)0714 - 2011/0314(CNS).
Amendment 190 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Acknowledges that the G20/OECD- led BEPS project was meant to tackle in a coordinated manner the causes and circumstances creating BEPS practices, by improving the coherence of tax rules across borders, reinforcing substance requirements and enhancing transparency and certainty; again clarifies that coherence of tax rules across borders need not and should not imply one size fits all remedies applied across the board, that in the end benefit high taxation economies which arguably maintain excessive levels of uneconomic and non- social public expenditure;
Amendment 195 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Notes that the G20/OECD 15-point BEPS action plan is being implemented and monitored and further discussions are taking place, in a broader context than just the initial participating countries, through the Inclusive Framework; calls on Member States to support a reform of both the mandate and the functioning of the Inclusive Framework to ensure that remaining tax loopholes and unsolved tax questions such as the allocation of taxing rights among countries are covered by the current international framework to combat BEPS practices; expresses the hope that efforts to achieve the desired elimination of tax loopholes and unsolved tax questions does not degenerate into a political practice by which tax malpractices in the larger European economies get offloaded onto the smaller peripheral economies of the EU;
Amendment 208 #
Motion for a resolution
Paragraph 21
Paragraph 21
21. Welcomes the adoption by the EU of ATAD I and ATAD II; takes note that they provide a minimum level of protection against corporate tax avoidance throughout the EU, while ensuring a fairer and more stable environment for businesses, from both demand and supply perspectives; welcomes the provisions on hybrid mismatches to prevent double non-taxation in order to eliminate existing mismatches and refrain from creating further mismatches, between Member States and with third countries; insists that such measures can be fully effective only if they are applied proportionately and in full transparency by all parties;
Amendment 215 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. Welcomes the provisions on Controlled Foreign Corporation (CFC) included in ATAD I to ensure that profits made by related companies parked in low or no-tax countries are effectively taxed; acknowledges that they prevent the absence or diversity of national CFC rules within the Union from distorting the functioning of the internal market beyond situations of wholly artificial arrangements as called for repeatedly by Parliament; deplores the coexistence of two approaches to implement CFC rules in ATAD I and calls on Member States to implement only the simpler and most efficient CFC rules as in ATAD I Article 7(2)(a); again insists that such measures can be fully effective only if they are applied in full transparency by all parties;
Amendment 221 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Welcomes the general anti-abuse rule for the purposes of calculating corporate tax liability included in ATAD I, allowing Member States to ignore arrangements that are not genuine and having regard to all relevant facts and circumstances aimed at obtaining a tax advantage; reiterates its repeated call for the adoption of a general and common anti- abuse rule, following wideranging consultations with all public and private stakeholders, namely in existing legislation and in particular in the parent-subsidiary directive, the merger directive and the interest and royalties directive;
Amendment 224 #
Motion for a resolution
Paragraph 24
Paragraph 24
24. Reiterates its call for a clear definition of permanent establishment so that companies cannot artificially avoid having a taxable presence in a Member State in which they have economic activity, always taking into account the problems posed by the ambiguities inherent in a digital presence; recalls nonetheless that healthy tax competition should be preserved in the EU as the European Commission in its Communication (2007/785) had recognised that "it is quite legitimate for tax considerations to play a role in the decision on whereto establish a subsidiary" and that "the objective of minimising one's tax burden is in itself a valid commercial consideration as long as the arrangements entered into with a view to achieving it do not amount to artificial transfers of profits";
Amendment 231 #
Motion for a resolution
Paragraph 26
Paragraph 26
26. Recalls its concerns relating to the use of transfer prices in ATP and consequently recalls the need for adequate action and improvement of the transfer pricing framework to address the issue; recognizes that subjective and contingent factors related to the competitive strategies followed by MNCs and the product/service mix of their final cross- border output, influence how internally within these conglomerates, and independently of tax finalities, transfer prices are defined; stresses the need to ensure that they reflect the economic reality, provide certainty, clarity and fairness for Member States and for companies operating within the Union, and reduce the risk of misuse of the rules for profit-shifting purposes, taking into account the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration 2010;
Amendment 237 #
Motion for a resolution
Paragraph 27
Paragraph 27
27. Emphasises that the EU actions aimed at addressing BEPS and ATP have equipped tax authorities with an updated toolbox to ensure fair tax collection; stresses that tax authorities should be responsible for making effective use of the tools without imposing an additional burden on responsible taxpayers, particularly SMEs; regrets that practices being adopted in this regard are creating excessive operational problems for SMEs;
Amendment 243 #
Motion for a resolution
Paragraph 28
Paragraph 28
28. Recognises that the new flow of information to tax authorities following the adoption of ATAD I and DAC4 creates the need for adequate resources to ensure the most efficient use of such information and to effectively reduce the current tax gap; calls upon national tax authorities to ensure that their human, material and financial capabilities are sufficiently in line with the growing requirements placed on them;
Amendment 253 #
Motion for a resolution
Paragraph 29
Paragraph 29
29. Welcomes the fact that Member States’ tax systems and overall tax environment have become part of the European Semester in line with Parliament’s call to that effect29 ; welcomes the studies and data drawn up by the Commission30 that allow situations that provide economic ATP indicators to be better addressed, and give a clear indication of the exposure to tax planning as well as furnishing a rich data base for all Member States on the phenomenon; recommends that in its presentations on the aforementioned issues, in the context of the European semester, the Commission clearly distinguishes between effects that relate to macroeconomic and macro-financial issues, and effects that follow from issues related to taxation policies; _________________ 29 European Parliament resolution of 25 November 2015 on tax rulings and other measures similar in nature or effect, OJ C 366, 27.10.2017, p. 51, paragraph 96. 30 Referred to above. The studies provide an overview of Member States’ exposure to ATP structures affecting their tax base (erosion or increase), although there is no stand-alone indicator of the phenomenon, a set of indicators seen as a ‘body of evidence’ nevertheless exists.
Amendment 283 #
Motion for a resolution
Paragraph 33
Paragraph 33
33. Welcomes the re-launch of the CCCTB project in a two-step approach, with the Commission’s adoption of interconnected proposals on CCTB and CCCTB; calls on the Council to swiftly adopt them, taking into consideration Parliament’s opinion that already includes the concept of virtual permanent establishment that would close the remaining loopholes allowing tax avoidance to take place and level the playing field in light of digitalisation; notes that among Member States there is resistance to the introduction of CCTB on the grounds that it represents the first step towards tax harmonisation which such states disagree with and on the grounds that there exist material doubts regarding whether its application would respect the principles of subsidiarity and proportionality; further emphasizes that, despite the agreement about the fact that the global economy is digitalising, any chosen solution shall apply to the economy broadly and not to narrow segments of the economy;
Amendment 299 #
Motion for a resolution
Paragraph 34
Paragraph 34
34. Notes that the phenomenon of digitalisation has created a new situation in the market, whereby digital and digitalised companies are able to take advantage of local markets without having a physical, and therefore taxable, presence in that market, creating a non-level playing field and putting traditional companies at a disadvantage; noteremarks that digital businesses models in the EU face a lower effective average tax burden than traditional business models31 ; _________________ 31 As evidenced in the ithe theoretical effective rates used in the Commission's Impact aAssessment of 21 March 2018 accompanying the digital tax package (SWD(2018)0081), according to which on average, digitalised businesses face an effective tax rate of only 9.5 %, compared to 23.2 % for traditional business models. do not stand up to empirical evidence, since the methodology used in this IA, by setting such rates at only 8.9 percent, is underestimating by about 20 percentage points (if average tax rates were taken into consideration) the effective corporate taxes for digital companies (Sources: The proposed EU digital services tax: Effects on welfare, growth and revenues, study by Copenhagen Economics ; Digital Companies and Their Fair Share of Taxes: Myths and misconceptions, Dr Matthias Bauer, Senior Economist, ECIPE 03/2018);
Amendment 341 #
Motion for a resolution
Paragraph 37
Paragraph 37
37. Stresses that since June 2014 the DAC has been amended four times; believes that the time has now come for a wide-ranging intergovernmental conference and treaty on taxation issues that would bring together the EU, the US, Japan, China, India, Russia among others, also with a view to streamlining and strengthening cooperative procedures to monitor tax avoidance;
Amendment 397 #
Motion for a resolution
Paragraph 45
Paragraph 45
45. Stresses that the proposal for public CBCR was submitted to the co-legislators just after the Panama papers scandal on 12 April 2016, and that Parliament adopted its position on it on 4 July 2017; recalls that the latter called for an enlargement of the scope of reporting and protection of commercially sensitive information; notes that during the first half of 2017, five working parties were established at Council level to tackle tax issues and deplores the lack of progress and cooperation from the Council since 2016then; urges for progress to be made in the Council so that it enters into negotiations with Parliament;
Amendment 410 #
Motion for a resolution
Paragraph 46
Paragraph 46
46. Recalls that the area of direct business taxation falls within the scope of State aid34 when arbitrary fiscal measures discriminate between taxpayers within the same tax jurisdiction, contrary to fiscal measures of a general nature that apply to all undertakings without distinction; _________________ 34 As the Court of Justice of the European Union stated as early as 1974.
Amendment 431 #
Motion for a resolution
Paragraph 50
Paragraph 50
50. Is concerned by the magnitude of tax unpaid for all Member States over long periods39 ; recalls that the aim of the recovery of unlawful aid is to restore the position to the status quo, and that calculating the exact amount of aid to be repaid is part of the implementation obligation incumbent on the national authorities; calls on the Commission to assess possible countermeasures, including fines, to prevent Member States from offering selective favourable tax treatment which constitutes State aid that is non- compliant with EU rules; _________________ 39 As in the case of decision of 30 August 2016 (SA.38373) on State aid implemented by Ireland to Apple. The tax rulings in question were issued by Ireland on 29 January 1991 and 23 May 2007.
Amendment 458 #
Motion for a resolution
Paragraph 54
Paragraph 54
54. Highlights that the high level of inward and outward foreign direct investment as a percentage of GDP in seven Member States (Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta, and the Netherlands) can only be partially explained by real economic activities taking place in these Member States;40 notes that no factual evidence is available to link this phenomenon to the existence or otherwise of letterbox companies in the Member States cited; notes moreover that by its very nature, the provision from within a given country of financial services to companies and individuals running significant cross border business, frequently involves on a fully legitimate basis the keeping on their behalf of funds, “parked” within a jurisdiction on a short or even long term basis, and this would account for the fact that countries where such financial services are provided, hold what is recorded as incoming or outgoing foreign direct investment that exceeds greatly the investment carrying capacity based on estimates of the “real” economy; _________________ 40 Kiendl Kristo I. and Thirion E., An overview of shell companies in the European Union, EPRS, European Parliament, October 2018, p.23.
Amendment 464 #
Motion for a resolution
Paragraph 55
Paragraph 55
55. Underlines that subject to the observation raised in paragraph 54 above, a high share of foreign direct investment held by special purpose entities exists in several Member States, particularly in Malta, Luxembourg and the Netherlands; 41 notes as well that special purpose entities resident in the EU reinforced their major role in FDI, accounting for 54.5 percent of the total EU FDI stocks held abroad and for 63.9 percent of the FDI stocks held by the rest of the world in the EU (Source : Eurostat 201/2017 - 21 December 2017); _________________ 41 Kiendl Kristo I. and Thirion E., op. cit., p.23.
Amendment 472 #
Motion for a resolution
Paragraph 56
Paragraph 56
56. Notes that, subject to the observation raised in paragraph 54 above, economic indicators such as an unusually high level of foreign direct investment, as well as foreign direct investment held by special purpose entities are ATP indicators42 ; _________________ 42 IHS, Aggressive tax planning indicators, prepared for the European Commission, DG TAXUD Taxation papers, Working paper No 71, October 2017.
Amendment 479 #
Motion for a resolution
Paragraph 57
Paragraph 57
57. Notes that the ATAD anti-abuse rules (artificial arrangements) cover letterbox companies, and that the CCTB and CCCTB would ensure that the income is attributed to where the real economic activity takes place, but without prejudice to the claim by number of Member States that CCTB and CCCTB are meant to function as enabling procedures for the harmonisation of tax rates within the EU, for which there is no agreement between Member States, and even less consensus;
Amendment 487 #
Motion for a resolution
Paragraph 58
Paragraph 58
58. Urges the Commission and the Member States to establish coordinated substantial economic activity requirements as well as expenditure tests as soon as meaningful and proportional methods for how which this can be done have been devised, discussed and agreed;
Amendment 512 #
Motion for a resolution
Paragraph 64
Paragraph 64
64. Takes note that according to the Commission, businesses trading on a cross- border basis currently suffer from compliance costs which are 11 % higher compared to those incurred by companies that only trade domestically; also notes that such tax compliance costs weigh heaviest on SMEs which is one reason why most SMEs have remained wary of reaping the advantages of the Single market;
Amendment 541 #
Motion for a resolution
Paragraph 71
Paragraph 71
71. Welcomesithout prejudging the issue since for Malta at least the tax treatment being applied for yachts was initially approved by the Commission itself, takes note of the opening of infringement procedures by the Commission on 8 March 2018 against Cyprus, Greece and Malta to ensure that they stop offering unlawful favourable tax treatment for private yachts, which distorts competition in the maritime sector; is compelled to note the discrimination demonstrated by the European Commission, which took action against smaller Member States, whereas such practices have been introduced in the yachting industry and continued by Member States like France and Italy;
Amendment 589 #
Motion for a resolution
Paragraph 82
Paragraph 82
82. Regrets that mainly as a result of the elimination of capital controls, high net worth individuals (HNWI) and ultra HNWI (UHNWI) continue to have the possibility to shift their earnings and funds or their purchases through different tax jurisdictions to obtain substantially reduced or zero liability by using the services of wealth managers and other intermediaries;
Amendment 591 #
Motion for a resolution
Paragraph 83
Paragraph 83
83. Notes with regret that corporate tax fraud, tax evasion and aggressive tax planning contribute to shifting the tax burden on to honest and fair taxpayers; notes though that this shift is also being achieved by budgetary policies that as in France, remain anchored on high taxation and high public expenditure levels which fail to deliver adequate returns that benefit the welfare of citizens;
Amendment 602 #
Motion for a resolution
Paragraph 84
Paragraph 84
84. Deplores the fact that some Member States have created tax regimes allowing non-nationals to obtain income tax benefits, hereby undermining other Member States’ tax base and fostering harmful policies which discriminate against their own citizens; proclaims that on a Europe-wide basis, a register should be established by the European Commission to list and publicise objectively all such policies;
Amendment 610 #
Motion for a resolution
Paragraph 85
Paragraph 85
85. Observes that a majority of Member States have adopted citizenship by investment (CBI) or residency by investment (RBI) schemes57 , generally known as visa or investor programmes, by which citizenship or residence is granted to non-EU citizens in exchange for financial investment; observes that these programmes do not necessarily require applicants to spend time on the territory in which the investment is madaccepts that on the record of how citizenship and/or residency has been accorded in the past by European states, these schemes – whether one wants to approve them or not – are completely legal and legitimate; notes that in international economic practice, such schemes have a long history, such as for the US system by which green permanent residence cards were granted to non- citizens in exchange for investing and creating jobs in the US; observes that these programmes do not necessarily require applicants to spend time on the territory in which the investment is made; notes that as an ongoing arrangement, Member States also regularly grant citizenship on grounds that are not publicised because they are carried out on an “in camera” and “private” basis, and are justified as following from considerations related to national security, acknowledgement of an individual's contribution to a country’s welfare (even if the value of such a contribution is never publicly quantified), another arbitrary reasons that are basically of a political or economic nature; _________________ 57 18 Member States have some form of RBI scheme in place, including four Member States that operate CBI schemes in addition to RBI schemes: Bulgaria, Cyprus, Malta, Romania. 10 Member States have no such schemes: Austria, Belgium, Denmark, Finland, Germany, Hungary, Poland, Slovakia, Slovenia and Sweden. Source: study entitled ‘Citizenship by investment (CBI) and residency by investment (RBI) schemes in the EU‘, EPRS, October 2018, PE: 627.128; ISBN: 978-92-846-3375-3.
Amendment 619 #
Motion for a resolution
Paragraph 86
Paragraph 86
86. Observes that at least 5 000 non-EU citizens have obtained EU citizenship through citizenship by investment schemes58 ; recognizes from a security point of view, as this figure refers to citizenship granted over a number of years, it is quite puny compared to the residence citizenship influx within the EU from outside that ran into the millions into the same period; _________________ 58 See the above-mentioned study.
Amendment 625 #
Motion for a resolution
Paragraph 87
Paragraph 87
87. Stresses that CBI and RBI schemes carry significantmight carry risks, including a devaluation of EU citizenship and the potential for corruption, money laundering and tax evasion unless due diligence procedures are followed to vet applicants ; reiterates its concern that citizenship or residence could be granted through these schemes without proper or indeed any customer due diligence (CDD) having been carried out; notes that several formal investigations into corruption and money laundering have been launched at national and EU level directly related to CBI and RBI schemes; underlines that, at the same time, the economic sustainability and viability of the investments provided through these schemes remain uncertain, but accepts that no evidence has been presented that such due diligence is not being carried out or that when it fails, appropriate corrective action is not being taken, such as by the revocation of the grant of citizenship; notes that several formal investigations into corruption and money laundering have been launched at national and EU level directly related to CBI and RBI schemes; requests that similar investigations are carried out with regard to the granting of citizenship by Member States on the basis of “private” ad hoc arrangements, which are never publicised ; understands that for some states, CBI and RBI schemes are seen as tools by which to attract investment and counter the disadvantages of small size and/or peripherality when operating within a continental single market; underlines that, at the same time, the economic sustainability and viability of the investments provided through these schemes remain uncertain but that indeed it might be premature to factually launch wide-ranging and dogmatic conclusions, positive or negative, about CBI/RBI arrangements;
Amendment 637 #
Motion for a resolution
Paragraph 88
Paragraph 88
88. Notes that these programmes regularly involve tax privileges or special tax regimes for the beneficiaries; understands that such tax treatment if and when given, has to be evaluated against the background of the financial commitment that applicant beneficiaries are being asked to make; is concerned that these privileges could hamper the objective of making all citizens contribute fairly to the tax system but accepts that no factual evidence that such is the case has been made available;
Amendment 642 #
Motion for a resolution
Paragraph 89
Paragraph 89
89. Worries that there is very little transparency in relation to the number and origin of applicants, the numbers of individuals granted citizenship or residency by these schemes and the amount invested through these schemes; worries too about the total lack of transparency about the granting of citizenship by countries that on the side of CBI/RBI schemes or without operating such schemes, grant citizenship on an ad hoc, “private” manner; appreciates the fact that some Member States make explicit the name and nationalities of the individuals who are granted citizenship or residency under these schemes;
Amendment 652 #
Motion for a resolution
Paragraph 90
Paragraph 90
90. Is concerned that according to the OECD, CBI and RBI schemes could be misused to undermine the common reporting standard (CRS) due diligence procedures, leading to inaccurate or incomplete reporting under the CRS, in particular when not all jurisdictions of tax residence are disclosed to the financial institution; notes that in the OECD’s view, the visa schemes which are potentially high-risk for the integrity of the CRS are those that give a taxpayer access to a low personal income tax rate of less than 10 % on offshore financial assets, and do not require a significant physical presence of at least 90 days in the jurisdiction offering the golden visa scheme; is concerned that Malta and Cyprus have schemes59 among those that potentially pose a high risk to the integrity of CRS; accepts however that proper grounds for such concerns need to be evidence based and recognizes that no such evidence has been presented at this stage for Malta, apart from allegations and conjectures, for otherwise that evidence would have been appended to this report; notes that Maltese authorities have provided information about the multi-stage due diligence and assessment processes they follow when processing applications for citizenship and that no evidence has been presented to show that it is defective; accepts too that policy directions in the taxation area cannot be solely pinned to statements based on “coulds” but need to make definitive statements on outcomes that have actually been recorded; _________________ 59 The Cypriot Citizenship by Investment: Scheme for Naturalisation of Investors by Exception, the Cypriot Residence by Investment, the Maltese Individual Investor Programme, and the Maltese Residence and Visa programme.
Amendment 658 #
Motion for a resolution
Paragraph 91
Paragraph 91
91. Concludes that the potential economic benefits of CBI and RBI schemes do not offset the serious money laundering and tax evasion risks they present; calls on Member States to phase out all existing CBI or RBI schemes as soon as possible but understands that contrary views also prevail, especially given the lack of evidence based claims about such risks; stresses that, in the meantime, Member States should properly ensure that enhanced CDD on applicants for citizenship or residence through these schemes is duly carried out, as required by AMLD5; calls on the Commission to monitor rigorously and continuously the proper implementation and application of CDD within the framework of CBI and RBI schemes until they are repealed in each Member State;
Amendment 669 #
Motion for a resolution
Paragraph 92
Paragraph 92
92. Calls on Member States to prevent conflicts of interest linked to CBI and RBI schemes, which might arguably arise when private firms which assisted the government in the design, management and promotion of these schemes, also advised and supported individuals by screening them for suitability and filing their applications for citizenship or residence;
Amendment 676 #
Motion for a resolution
Paragraph 93
Paragraph 93
93. Urges the Commission to finalise its study on CBI and RBI schemes in the Union as well as to include in its study all other arrangements by which citizenship is granted, especially on an ad hoc, “private” and hidden basis for political economic or security or other reasons; urges the Commission to examine whether, and, if so, which of these schemes posed a threat to EU legislation;
Amendment 690 #
Motion for a resolution
Paragraph 96
Paragraph 96
96. Recalls that free ports are warehouses in free zones, which were – originally – intended as spaces to store merchandise in transit; deplores the fact that they have since become popular for the storage of substitute assets, including art, precious stones, antiques, gold and wine collections – often on a permanent basis;60 but recalls that in the past this practice was part of the operating profile of major banks and financial institutions, as well as of leading European ministries and foundations; _________________ 60 EPRS study entitled ‘Money Laundering and tax evasion risks in free ports‘, October 2018, PE: 627.114; ISBN: 978-92- 846-3333-3.
Amendment 696 #
Motion for a resolution
Paragraph 98
Paragraph 98
98. Underlines that there are over 80 free zones in the EU61 and many thousands of other warehouses under ‘special storage procedures’ in the EU, notably ‘customs warehouses’, which can or could offer the same degree of secrecy and (indirect) tax advantages;62 _________________ 61 European Commission list of EU free zones. 62 EPRS study entitled ‘Money Laundering and tax evasion risks in free ports’, October 2018, PE: 627.114; ISBN: 978-92- 846-3333-3.
Amendment 698 #
Motion for a resolution
Paragraph 100
Paragraph 100
100. Notes that money laundering risks in free ports arcould be directly associated with money laundering risks in the substitute assets market;
Amendment 723 #
Motion for a resolution
Paragraph 105
Paragraph 105
105. Takes the view that the CoC Group should mandatorily screen and clear each tax amnesty programme before its implementation by a Member State; takes the view that a taxpayer or ultimate beneficial owner of a company who has already benefited from one or more tax amnesties should never be entitled to benefit from another one; calls for national authorities managing the data on persons who have benefited from tax amnesties to engage in an effective exchange of the data from law enforcement or other competent authorities investigating crimes other than tax fraud or tax evasion;
Amendment 740 #
Motion for a resolution
Paragraph 109
Paragraph 109
109. Deplores the fact that a large number of Member States have failed to fully or partially transpose AMLD4 into their domestic legislation within the set deadline, and thatthough it queries whether such deadline was set realistically, given the huge burden of regulatory provisions that national financial authorities have been needing in past years to assimilate, promulgate and monitor, even if for this reason, infringement procedures have had to be opened by the Commission against them, including referrals before the Court of Justice of the European Union67 ; calls on these Member States and the European Commission to swiftly remedy this situation; reminds with circumspection Member States of their legal obligation to respect the deadline of 10 January 2020 for the transposition of AMLD5 into their domestic legislation; _________________ 67 On 19 July 2018, the Commission referred Greece and Romania to the Court of Justice of the European Union for failing to transpose the fourth Anti-Money Laundering Directive into their national law. Ireland had transposed only a very limited part of the rules and was also referred to the Court of Justice.
Amendment 750 #
Motion for a resolution
Paragraph 111
Paragraph 111
111. Condemns the fact that systemic failures in the enforcement of AML requirements, coupled with inefficient supervision, has led to a number of recent high-profile cases of ML in European banks linked to systematic breaches of the most basic KYC and CDD requirements; regrets the unequal treatment of the alleged system failures, such that large scale breaches of AML requirements that happened over the long term by the bigger financial institutions in the larger Member States went unobserved while relatively smaller scale, shorter-term failures in smaller economies were slapped with the full weight of sanctions on a European scale, and opines that this undermines the thrust of AML provisions;
Amendment 770 #
Motion for a resolution
Paragraph 114
Paragraph 114
114. Notes that in the case of Danske Bank, transactions worth upwards of EUR 200 billion flowed in and out of its Estonian branch71 over a number of years not just for one or two years as for instance in the case of Pilatus bank without the bank having put in place adequate internal AML and KYC procedures, as subsequently admitted by the bank itself and confirmed by both the Estonian and Danish Financial Supervisory Authorities; considers that this failure shows a complete lack of responsibility on the part of both the bank and the competent national authorities; calls on the competent authorities to carry out urgent evaluations of the adequacy of AML and KYC procedures in all European banks to ensure proper enforcement of the Union’s AML legislation; _________________ 71queries why Danske Bank and its supervisory authority have not yet been held up for systemic breaches of EU regulations as in the case of Pilatus bank; Ibid.
Amendment 775 #
Motion for a resolution
Paragraph 116
Paragraph 116
116. Highlights that the European Central Bank (ECB) has withdrawn the banking licence of Malta’s Pilatus Bank following the arrest in the United States of Ali Sadr Hashemi Nejad, Chairman of Pilatus Bank and its sole shareholder, on, among other things, charges of money laundering with respect to sanctions applied by the US to Iran and Venezuela and following a request made by the Malta Financial Services Authority to do so, submitted in June 2018; stresses that the European banking Authority (EBA) concluded that the Maltese Financial Intelligence Analysis Unit had breached EU law because it had failed to conduct an effective supervision of Pilatus Bank due to, among other things, procedural deficiencies and lack of supervisory actions; expresses surprise that while the Maltese financial intelligence analysis unit was stigmatised by the EBA for lack of effective supervision over Pilatus bank, a relatively minor investment vehicle, a similar procedure was not followed with respect to the relevant supervisory and investigative authorities in the cases of ING bank, Danske Dank, Latvian ABLV, or Deutsche Bank, etc. where money laundering activities were much more important in value and volume, and of much longer standing;
Amendment 789 #
Motion for a resolution
Paragraph 117
Paragraph 117
117. Is aware that the current AML legal framework has so far consisted of directives and is based on minimum harmonisation, which has led to different national supervisory and enforcement practices in the Member States; calls on the Commission to assess, in the context of a future revision of the AML legislation, in the required impact assessment, whether a regulation would be a more appropriate legal act than a directive; calls, in this context, for a swift transformation into a regulation of the AML legislation if the impact assessment so advises but subject to a full understanding about how this should be done proportionately and with full awareness of the need to attract new direct investment by the smaller Member States, especially those having a peripheral status;
Amendment 839 #
Motion for a resolution
Paragraph 127
Paragraph 127
127. Highlights that in order to fight effectively against money laundering activities, cooperation is essential not only between Member States’ FIUs but also between Member States’ FIUs and the FIUs of third countries; calls on the Commission to engage actively with Member States to find mechanisms to improve and enhance the cooperation of Member States’ FIUs with the FIUs of third countries; calls on the Commission to take opportune action in this regard at the relevant international forums, such as the OECD and the Financial Action Task Force (FATF); recommends that in all such initiatives, top priority be given to the tracking of illegal financial flows organised and powered by organised crime; considers that in any resulting agreement proper consideration should be given to the protection of personal data;
Amendment 893 #
Motion for a resolution
Paragraph 138
Paragraph 138
138. Underlines the positive potential of new distributed ledger technologies, such as blockchain technology; notes at the same time the increasing abuse of new payment and transfer methods based on these technologies to launder criminal proceeds or to commit other financial crimes; acknowledges the need to monitor technological developments to ensure that legislation addresses in an effective manner the abuse of new technologies and anonymity, which facilitates criminal activity, without curtailing its positive aspects; stresses that among the latter, there have been the emerging opportunities to develop a decentralised digitalised world, with notably the progress of crowdfunding, results in time and money savings for smaller enterprises and peer-to-peer cheap secure transactions;
Amendment 1043 #
Motion for a resolution
Paragraph 161
Paragraph 161
161. Believes that supporting developing countries in combating tax evasion and aggressive tax planning, as well as corruption and secrecy that facilitate illicit financial flows, is of the utmost importance for strengthening policy coherence for development in the EU and improving developing countries’ tax capacities and domestic resource mobilisation; believes that the EU should encourage and insist with European companies having a mining, manufacturing, touristic, construction, farming or processing facility in Africa that they should subscribe to a code of good behaviour that among others, bans participation in schemes that involve corruption, money laundering, tax avoidance, tax evasion and ATP;
Amendment 1112 #
Motion for a resolution
Paragraph 172
Paragraph 172
172. Calls on the Commission to review all tax treaties in force and signed by Member States with third countries to ensure that they are all compliant with new global standards such as the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (‘MLI’); asks the Commission to release recommendations to Member States regarding their existing bilateral tax treaties to ensure that they include general anti-abuse rules, looking at genuine economic activity and value creation; stresses nevertheless that such issues should remain within the remit of national tax sovereignty exercised in compatibility with OECD rules;
Amendment 1161 #
Motion for a resolution
Paragraph 179 c (new)
Paragraph 179 c (new)
179 c. Pays tribute to the brave actions of whistle-blowers and recognizes their fundamental role in a democratic and accountable society;
Amendment 1167 #
Motion for a resolution
Paragraph 180 a (new)
Paragraph 180 a (new)
180 a. Calls for a general EU fund to be set up to give appropriate financial support to whistle-blowers whose livelihood is put at risk as a result of disclosures of criminal activity or facts with clear public interest;
Amendment 1185 #
Motion for a resolution
Paragraph 184
Paragraph 184
184. Acknowledges the difficulties faced by journalists when investigating or reporting on cases of money laundering, tax fraud, tax evasion and aggressive tax planning; worries that investigative journalists are often subject to physical threats and intimidation; calls for adapted protection to be given at national levels to journalists involved in the investigation of activities with a money laundering component;
Amendment 1187 #
Motion for a resolution
Paragraph 185
Paragraph 185
185. Strongly condemns acts of violence against journalists; recalls with dismay that in recent years journalists involved in the investigation of dubious activities with a money laundering component have been murdered in Malta and Slovakia85 though there is no evidence as yet that there is any connection between the murder that took place in Malta and revelations about alleged money laundering offences; _________________ 85 Daphne Caruana Galizia, killed in Malta on 16.10.2017; Ján Kuciak, killed together with his partner Martina Kušnírová, in Slovakia on 21.2.2018.
Amendment 1190 #
Motion for a resolution
Paragraph 186
Paragraph 186
186. Urges the Maltese authorities to make progress in identifying the instigator of the murder of Daphne Caruana Galizia, even while acknowledging that the pace, tempo and outcome of criminal investigations can hardly be determined by political urgings, no matter where they come from; notes as well that the Maltese Government has engaged with international institutions such as Europol, FBI, and also the Dutch Forensic Institute, to strengthen its expertise;
Amendment 1200 #
Motion for a resolution
Paragraph 188
Paragraph 188
188. Deplores the fact that investigative journalists are often victims of abusive lawsuits intended to censor, intimidate and silence them by burdening them with the costs of legal defence until they are forced to abandon their criticism or opposition; recalls that these abusive lawsuits constitute a threat to fundamental democratic rights, such as to freedom of expression, freedom of the press and freedom to disseminate and receive information; calls on the Member States to put in place mechanisms to prevent strategic lawsuits against public participation (SLAPP); considers that these mechanisms should take duly into consideration the right to a good name and reputation; understands that wideranging allegations backed by no proof except the say-so of unidentified sources can have devastating and unwarranted political, economic and social effects on the individuals or companies that they target, especially when publicised on social media; accepts that those who indulge in wilfully irresponsible or malicious attacks of this sort should be held to be accountable for the damage they inflict; calls on the Commission to assess the possibility of taking legislative action in this area;
Amendment 1207 #
Motion for a resolution
Paragraph 188 a (new)
Paragraph 188 a (new)
188 a. Highlights that trade unions should have a greater role in the negotiation of whistleblowing policies and channels in the workplace; calls on Member States to allow, in national law, for whistle-blowers to report wrongdoing to a union representative if they feel they cannot report it internally;
Amendment 1215 #
Motion for a resolution
Paragraph 189
Paragraph 189
189. Welcomes the work done by the Platform for Tax Good Governance; notes that the mandate of the Platform applies until 16 June 2019; calls for it to be extended or renewed to ensure that genuine and transparent civil society concerns and expertise are heard by Member States and the Commission; encourages the Commission to broaden the scope of the experts invited to the Expert Group on Money Laundering and Terrorist Financing (EGMLTF) to include experts from the private sector (business and NGOs);
Amendment 1244 #
Motion for a resolution
Paragraph 203
Paragraph 203
203. Considers that it is vital for the exercise of democratic control over the executive that Parliament be empowered with investigative and inquiry powers that match those of Member States’ national parliaments; believes that in order to exercise this role Parliament must have the power to summon and compel witnesses to appear and to compel the production of docu although care must be taken to ensure that any investigative and inquiry powers at a European level should not overlap with or duplicate the investigative and inquiry powers held by national parliaments; believes that in order for these rights to be exercised Member States must agree to implement sanctions against individuals for failure to appear or produce documents in line with national law governing national parliamentary inquiries and investigations; urges the Council and the Commission to engage in the timely conclusion of the negotiations on the proposal for a regulation of the European Parliament on the detailed provisions governing the exercise of Parliament’s right of inquiry;
Amendment 1248 #
Motion for a resolution
Paragraph 204
Paragraph 204
Amendment 1260 #
Motion for a resolution
Paragraph 205
Paragraph 205
Amendment 1271 #
Motion for a resolution
Paragraph 206
Paragraph 206