Romania and the Panama Papers

Following the Panama Papers revelations, the Romanian authorities have called for the improvement of the legal framework aimed at combating tax evasion.

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România Internațional, 13.04.2016, 13:49

The golden days of tax havens began after World War Two. Tax havens first appeared as a means of paying lower taxes. Using them is not considered illegal, only possibly immoral, but some may not even agree with this description. In recent years, financial experts have warned that tax havens have become more than a way of paying less tax, thus concealing a problem in the state of residence. Under the protection of anonymity, offshore companies may be used to channel untaxed or illegally obtained money.

The recent Panama Papers scandal shows that heads of state, top-level politicians, billionaires, celebrities, sports figures and financial institutions, as well as criminal networks, have used more than 20 tax havens to hide their money. From 1977 until 2015, the Panama-based Mossack Fonseca law firm, the worlds fourth biggest offshore law firm, created and managed more than 214,000 shell companies for their clients from over 200 countries and territories, including Romania. The Social Democrat Euro MP Victor Negrescu said in a press release that according to revelations in the local media, the amount of money hidden away in tax havens by Romanian business people is equal to the countrys health care budget and more than the budget allocated to youth. Neculae Plaiasu, the head of the National Office for Prevention and Control of Money Laundering provides some specific figures:

“From 2003 and March 2016, the Office has records of 286 natural persons and legal entities that transferred money to and from Panama. In specific figures, 21.7 million euros went in and 50.5 million came out.

Neculae Plaiasu also said his Office last year submitted 13 reports to the General Prosecutors Office with the High Court of Cassation and Justice and another 6 to the Romanian Intelligence Service over suspicious financial activities. The president of the National Agency for Tax Management Dragos Doros says there are suspicions about Romanian citizens and companies who may have carried out money laundering activities in connection to the Panama Papers. The Agency is now working to obtain the necessary information. Dragos Doros:

“At this point, every piece of tax information must be carefully weighed. This type of information cannot be established in a matter of days. No tax authority in Europe has so far made public its conclusion.

Both the head of the National Agency for Tax Management and that of the National Office for Prevention and Control of Money Laundering have called for an improvement in the legal framework to prevent tax evasion.

(Translated by C. Mateescu)