WASHINGTON (Reuters) – Europe’s biggest nations launched a joint effort on Thursday to clamp down on tax evasion, responding to damaging revelations of financial wrongdoing by the rich and powerful in the so-called Panama Papers.
The finance ministers of Britain, Germany, France, Italy and Spain agreed to share detailed data on the ownership of companies, trusts and foundations, making it more difficult for actual owners to hide their wealth and income from tax authorities.
The leak of thousands of confidential documents from a Panamanian law firm earlier this month has had political repercussions in many countries, forcing Iceland’s prime minister to quit and putting British Prime Minister David Cameron under pressure over his family’s financial affairs.
“A global move towards interlinking country registries will provide, for the first time, international real-time access to tax and law enforcement agencies on company ownership,” Britain’s Treasury said about the initiative presented to the G20 presidency.
Unveiling their proposals alongside IMF chief Christine Lagarde and OECD chief José Ángel Gurría, the five nations committed to establishing a register as soon as possible to detail the beneficial owners of companies, trusts, foundations, and shell-companies, making it available for tax administration and law enforcement authorities.
“As a first step we are launching a pilot initiative for automatic exchange of such information on beneficial ownership,” the ministers said in a joint statement, calling on others to join the initiative.
Urging a global exchange of beneficial ownership information in order to remove ‘the veil of secrecy under which criminals operate’, the ministers acknowledged cracks in the current framework and called on others to apply enhanced standards of transparency.