Lux-Leaks: Deltour trial is stress test for tax justice

A press release of Fabio De Masi


Member of the European Parliament Fabio De Masi (DIE LINKE.), coordinator in the special committee on tax avoidance (TAXE) for the left GUE/NGL group, has testified during the trial against the whistleblower Antoine Deltour and one of his former colleagues as well as the journalist Edouard Perrin. He comments after having left the witness stand:

"When testifying, I made clear that the revelations aided by Deltour and Perrin have been instrumental in shedding light on multiple breaches of EU law, in particular in the area of Member States' obligations to exchange information on tax matters including tax rulings. Mr Marius Kohl, the Luxembourg tax officer who did not accept the invitation of the TAXE committee and also failed to appear as witness during the trial, had confirmed in an interview with the Wall Street Journal that the administrative practice in Luxembourg when issuing tax rulings was quite different from the internationally agreed arm's length principle based on comparable market prices for intra-company transactions. In addition, the European Commission would not have been in a position to successfully expand and complete its state aid investigations without the revelations. And even large audit and accounting firms confirmed in the TAXE committee that making tax rulings public would not per se be at odds with tax secrecy provisions."

De Masi continues: "My statements echo the report of the TAXE committee as well as similar statements by EU competition commissioner Vestager on the relevance of the LuxLeaks. Unfortunately, I was not permitted to illustrate the dramatic repercussions for whistleblowers in other contexts who tried to create awareness about misconduct internally with their employer or public services. Julius Baer whistleblower Rudolf Elmer, for instance, was turned away by Swiss authorities and his family subjected to harassment at a scale that his daughter attempted suicide. Two compliance officers of Berenberg Bank in Hamburg were sacked after internal complaints. And the head of the Luxembourg financial oversight body is himself implicated in the Panama Leaks. There is hence no independent body that whistleblowers can revert to and they enjoy entirely insufficient protection, as the TAXE committee concluded and President of the European Commission Jean-Claude Juncker conceded."

De Masi concludes: "The Left in the European Parliament will request that the conclusions of the insufficient protection of whistleblowers are put on the agenda of the May plenary. Following article 325 TFEU, the EU has to take measures against fraud and for the protection of its financial interests, which is a basis for a European legislation to protect whistleblowers. Our Dutch colleague Dennis De Jong (SP) is preparing a report on the matter for the Parliament. The hastened adoption of the Trade Secrets Directive by the Parliament's large groups further reduces the protection of whistleblowers. The Commission should urgently create legal certainty and safety for people like Antoine Deltour and Edouard Perrin by proposing an encompassing and robust protection legislation."