German Finance Minister Wolfgang Schaeuble drafted a plan on Sunday that would combat tax havens. The details of the plan involve instituting a network of registers that would list the actual owners of companies.
According to Daily Mail, since the huge leak of Panama-based law firm, Mossack Fonseca, many world leaders have been embarrassed and shamed as their offshore accounts were revealed. Also, Germany made closer international cooperation on tax evasion a priority during its presidency of G7 economic powers in 2014-2015. As initial progress to this, Schaeuble said on a public broadcaster that if company registers' listing the owner of the firms were networked internationally, it is a possibility that they might able to find the list of real people who are hiding behind offshore companies.
Fortune wrote that in the European Union, the registers have already been agreed to be a part of the fourth directive on money laundering that is expected to be implemented nationwide by mid-2017. Schaeuble revealed that an agreement on automatically swapping tax information that has been signed by more than 100 countries will come to an effect soon. He added that due to the Panama Paper scandal, other countries not involved have been pressured to sign up. A government paper showed elements of the Finance Minister's 10-point agenda wherein Panama and other holdouts are set to join the tax data exchange agreement.
Moreover, News Week reported that the Global Forum of Organization of Economic Cooperation and Development will oversee and act as the supervisor that will probe the exchanging of data and come up with sanctions to the uncooperative countries. Schaeuble wants the various national and international blacklists of noncompliant tax havens to be standardized and OECD will take lead to this.
Banking watchdogs are already checking lenders who have ties to the Panama Papers although Schaeuble said German banks had "largely put things in order already," before adding that they "have made a lot of progress in recent years." Lastly, his plan aims for an increased progress in battling money laundering in the commercial sector as the ones in their German financial sector.
