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Committee of Inquiry into Money Laundering, Tax Avoidance and

Tax Evasion (PANA)

Public Hearing

Anti-money laundering and tax evasion:


Who assures compliance with the rules and
enforces them?
Monday, 14 November 2016 - 15:00 - 18:30
Jzsef Antall (JAN) 4Q2
Brussels
Draft PROGRAMME
15:00 - 15:10 Welcome by the PANA Chair
15:10 - 15:40 First panel: experience from an EU perspective
Presentations by speakers (at 10 min maximum each)
Mr. Giovanni Kessler, Director-General of the European Anti-Fraud Office
(OLAF)
Mr. Simon Riondet, Europol Business manager Head of the Financial
intelligence Group (EUROPOL, including FIU.net)
Mr. Klaus Meyer-Cabri, German Member of EUROJUSTs College

15:40 - 16:45 Discussion with PANA Members

16:45 - 17:15 Second panel: experience from a national perspective


Presentations by speakers (at 10 min maximum each)
Mr. Philippe de Koster, President of the CTIF-CFI, Belgian Financial
Intelligence Unit (FIU)
Mr. Michel Claise, Belgian Prosecutor

Secretariat of the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion
pana-secretariat@europarl.europa.eu

Mr. Norbert Naulin, Head of the special investigation unit EOKS


(Investigation Group Organised Crime Tax Fraud) of the North RhineWestphalia tax authorities who analyse leaked data
Mr Patrick Montagner, Deputy Secretary General of the College of the
French prudential supervisor (Autorit de contrle prudentiel et de
rsolution) (via videoconference)
17:15 - 18:25 Discussion with PANA Members
18:25 - 18:30 Conclusions by the PANA Chair

Secretariat of the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion
pana-secretariat@europarl.europa.eu

OLAF is the European Union Anti-Fraud office in charge of investigating fraud against the EU budget
and serious misconduct within the European institutions. While it has an individual status in its
investigative function, OLAF is also part of the European Commission, under the responsibility of
Kristalina Georgieva.

EUROPOL is the European Unions enforcement agency. Its main objective is the achievement of a
safer Europe for the benefit of all EU citizens. Headquartered in The Hague, it assists the EU member
states in the fight against terrorism and serious international crime whilst cooperating with non-EU
states and international organisations.

EUROJUST is an agency of the European Union that deals with judicial cooperation in criminal matters.
Its main mission is to stimulate and improve the coordination of investigations and prosecutions
between the competent authorities in the Member States and improves the cooperation between the
competent authorities of the Member States, in particular by facilitating the execution of international
mutual legal assistance and the implementation of extradition requests.

The Belgian FIU (CTIF-CFI) is an independent administrative authority with legal personality and a
central part of the Belgian anti-money laundering and counter-terrorist financing (AML/CFT) system.
It is led by magistrate Mr. Philippe de Koster, supervised by the Ministers of Justice and Finance and
composed of legal and financial experts and a senior officer seconded from the federal police.

Patrick Montagner is Deputy Secretary General of the of the French prudential supervisor Autorit
de contrle prudentiel et de rsolution (ACPR). The ACPR is responsible for supervising the banking
and insurance sectors in France. It operates under the auspices of the French central Bank, Banque de
France.

Michel Claise, Belgian Prosecutor (Juge d'instruction) - is the main Belgian figure in the fight against
financial crime. A juge dinstruction is the magistrate responsible for conducting the investigative
hearing that precedes a criminal trial. He handles a case only if ordered to do so by the procureur
(public prosecutor) or when requested to do so by a private citizen. In conducting the hearing, the
juge dinstruction issues warrants, the set of investigative duties performed to detect perpetrators,
collecting evidence and taking action to possibly take the case to court.

Norbert Naulin is Head of the special investigation unit EOKS (Investigation Group Organised Crime
Tax Fraud) of the North Rhine Westphalia tax authorities. The EOKS, consisting of 15 specialised tax
investigator, was established in the beginning of 2015 by the State Office of Criminal Investigation to
improve action against globally organised actors. The EOKS evaluated some data from the Panama
Papers.

PUBLIC HEARING
ANTI-MONEY LAUNDERING AND TAX EVASION:
WHO ASSURES COMPLIANCE WITH THE RULES AND ENFORCES
THEM?
MONDAY, 14 NOVEMBER 2016
15.00 - 18.30
Room: Jzsef Antall (JAN) 4Q2)

CVS OF THE SPEAKERS

Giovanni Kessler
An Italian public prosecutor with an expertise in organised crime, Giovanni Kessler took over
the management of the European Anti-Fraud Office (OLAF) AS Director-General in 2011.
OLAF is the only European body mandated to investigate fraud involving European Union
funds, but also serious misconduct of EU staff and members of the EU institutions. As
OLAF's Head, Mr. Kessler prompted the reorganisation of the office, significantly increasing
its efficiency and facilitating the optimal use of its resources.

Prior to working at OLAF, Mr. Kessler served in the Italian National Parliament, was
President of the Legislative Assembly of his Region and Head of the National Authority to
Combat Counterfeit.

An expert in the fight against fraud, and with a keen interest in security, justice and anticorruption, Mr. Kessler's career spans many European countries. He has been Deputy Head
of the OSCE Kosovo Verification Mission in Pristina, Vice-President of the Parliamentary
Assembly of the Organisation for Security and Cooperation in Europe, and member of
several European Commission and Council of Europe evaluation missions across the Eastern
Europe. He was also a member of several International Election Monitoring missions in the
United States and beyond.

In 2012, Mr. Kessler was elected President of the European Partners Against
Corruption/European Anti-Corruption Network (EPAC/EACN), a formal network of
European anti-corruption authorities. Since 2013, he has also been a member of the Executive
Committee of the International Association of Anti-Corruption Authorities (IAACA).

Simon RIONDET
Simon RIONDET is the Head of Financial Intelligence in EUROPOL
French Police superintendent, he started his career in the French internal intelligence service.
He was then assigned to the National Crime Squad where he had several management position
including regional units (criminal and financial investigations teams), surveillance and
Intervention Unit (BRI), and the direction of a joint inter-agency task force dedicated to the
fight against drug trafficking in the French west Indies.
He was then appointed as head of the French liaison desk in EUROPOL, responsible for all
French law enforcement agencies' cooperation with the European organisation.
He is responsible for the entire spectrum of financial investigations from money laundering,
asset recovery to cooperation between the EU FIUs (FUI NET project).

Source: Simon Riondet

Klaus Meyer-Cabri - Eurojust, National Member for Germany


Deputy Director General Klaus Meyer-Cabri is the National Member for Germany at Eurojust,
the Chair of the Brussels Team and as of November 2016 the Vice-President of Eurojust.
Throughout his career, Mr Meyer-Cabri has made an important contribution to fostering and
improving legal cooperation among the Federal Ministry of Justice and Consumer Protection
and the Member States of the European Union. Mr Meyer-Cabri has been employed at the
Federal Ministry of Justice and Consumer Protection since 1992. Here his last position was
Head of the Office for EU Justice Policy and International Cooperation. Significantly, Mr
Meyer-Cabri has gathered a great deal of international experience due to his many years as a
Legal Counsellor at the Permanent Representation of the Federal Republic of Germany to the
European Union in Brussels, where he was heavily involved in the preparatory work to
establish Eurojust.
Source : Eurojust

PHILIPPE DE KOSTER
PREMIER AVOCAT GNRAL PRSIDENT CTIF-CFI
Philippe de Koster was appointed director of the Belgian Financial Intelligence Processing Unit
(CTIF CFI) on 4 March 2016. From 18 April 2003 until 3 March 2016 he held the position
of deputy director.
On 1 September 2015, he was appointed first advocate-general at the Labour Court of Mons.
He has been temporarily seconded as advocate-general at the Public Prosecutors Office of the
Court of Cassation since 1 June 2016.
Mr de Koster gained professional experience working as a deputy public prosecutor from 1988
until 1997 and later joined the European Anti-Fraud Office (OLAF) of the European
Commission until 1998. From 20 July 1999 until 15 July 2003, he was deputy head of Cabinet
of the Minister of Justice. de Koster was also appointed advocate-general at the Labour Court
of Mons on 29 April 2003. From 1 October 2004 until 31 December 2010, he served as
advocate-general seconded at the Public Prosecutors Office of the Court of Cassation.

Michel CLAISE, Juge dinstruction


Avocat durant 20 ans (ancien prsident du jeune barreau, membre du conseil de l'ordre,
fondateur de l'institut des droits de l'homme, aujourd'hui avocat honoraire), Juge d'instruction
financier depuis 16 ans, formateur auprs de professionnels en matire de lutte contre le
blanchiment (banques, expert-comptables, rviseurs d'entreprise, cole de police, formation
judiciaire), enseignant universitaire (matre de confrence l'universit D'Aix en Provence)
dans le cadre du master de lutte contre la criminalit financire, sminaires l'ULB, l'UCL,
l'Ichec, directeur de mmoires l'cole de criminologie de l'ULB notamment), auteur de
plusieurs tudes sur le sujet dont un essai rcent (Essai sur la criminalit financire, le club des
Cassandre), romancier (7 romans), chroniqueur La Libre, prsident du thtre des Martyrs.

Norbert NAULIN
Institution

Date :
from (month/year) to (month/year) :
Degree(s) or Diploma(s) obtained :

Grammar School Gymnasium am


Neandertal, Erkrath
North Rhine - Westphalia
08/1970 to 08/1979
Abitur: German school leaving examination
and university entrance qualification

Institution

University for finances of the state of North


Rhine Westphalia, Nordkirchen

Date :
from (month/year) to (month/year) :
Degree(s) or Diploma(s) obtained :

09/1980 to 08/1983

7.

(Diplom Finanzwirt); diploma finance


economist

Membership of professional bodies:

Financial administration of the State of North Rhine Westphalia

8.

Present position:
Senior Investigator, head of special investigation unit EOKS (Investigation Group
Organised Crime Tax Fraud); Tax Fraud Investigation Bureau Dsseldorf,
North Rhine Westphalia

9.

Specific countries experience:


Country
Italy/Sicily

Belgium/Liege

Date : from (month/year) to (month/year)


2001/2002: Investigations in a case of
organized crime together with the Italian
Carabinieri and the Italian customs service.
2003: Investigations in a case of organized
crime together with the Belgian police.

Romania/Bucharest

Romania/Bucharest

Romania/Bucharest

Austria/Vienna

2008: STE: Twinning Project Development


of the Anti-corruption General Directorate of
the Ministry of Administration and Interior
2011-2012: Expert for the IRZ (Bonn) in the
Project Developing professional financial
investigators in Romania.
2012: Special investigations tactics and
technics in cases of corruption, economic
crime and tax-evasion. Seminar for
prosecutors and judges. Project of the IRZ
and the NIM Romania.
2015: Common Investigations in Cases of
Tax Fraud, Money Laundering and
Corruption
2013: Presentations and workshops as
expert in the EACT-Project of the EU.

Skopje/Macedonia

2013: Presentation: Investigation - Technics


and - Tactics in Cases of Tax Fraud and
Corruption as expert for the IRZ.
2016: Investigation in Cases of Corruption
and Tax Fraud

Ljubljana/Slovenia

2013: Presentations and workshops as


expert in the EACT-Project of the EU.

Tallinn/Estonia

2014: Participant of EACT-Conference.

10. Professional Experience Record:


Date: from (month/year)
to (month/year)
Location
Company
Position
Description

08/1983 to 05/1987
Dsseldorf/North Rhine Westphalia
Tax Office Dsseldorf - Mettmann
Official in charge of tax execution
The execution of paying taxes in cases of non-payment.
Verifying the account of companies.

Date : from month/year) 05/1987 until 10/2011


to (month/year)
Location
Wuppertal
Company
Position

Tax Fraud Investigation Department Wuppertal


Investigator

Description

Investigations in all cases of tax fraud.

In this time:
Date : from month/year) 09/1991 to 09/1992
to (month/year)
Location
Potsdam/State of Brandenburg
Company
Position
Description

Tax Fraud Investigation Department Potsdam-Stadt


Investigator, instructor and adviser
Send by the government of North Rhine Westphalia to the state
of Brandenburg for the development of a new Tax Fraud
Investigation Department in the state of Brandenburg (former
GDR), here the department in Potsdam and the education of new
tax fraud investigators.

11. Special Activities


In collaboration with Mr. Marius Richter (Chief Inspector of the State Bureau of Criminal
Investigations North Rhine Westphalia, Anti Corruption Department) lecturer of the book
Anti-Corruption-Wall - Strategies against corruption in administrations and companies -,
published in October 2011 (ISBN 978-3-86881-318-0).
In collaboration with Mr. Helmut Leithuser (Chief Judge at the District Court Wuppertal) lecturer
of the book Handbuch der bewhrten Methoden zur Durchfhrung von Finanzermittlungen
(Compendium of Established Methods of Financial Investigations); (Deutsche Stiftung
Internationale Rechtliche Zusammenarbeit und EU; deposited at the Staatsbibliothek Berlin)
12. Professional Contact Address:
Norbert Naulin
EOKS
Landeskriminalamt NRW
Vlklinger Strae 49
40221 Dsseldorf

(professional)

Patrick Montagner
Born in 1965, I have joined the French central bank in 1988 where I have held various positions,
mainly in the financial supervision area.

From 1996 to 2006, various positions within the on-site banking department
appointed in September 2008 as director for the department in charge of large French
international banks and of foreign banks in France. During this period, I was member
of the Senior Supervisors Group and of the Financial Stability Boards (FSB)
Supervisory Intensity and Effectiveness Working Group.
nominated in April 2012 as director of a department in charge of Insurance supervision.
since March 2014, deputy secretary general of the Autorit de contrle prudentiel et de
resolution (ACPR), the French prudential and resolution authority.

Autorit de contrle prudentiel et de rsolution


61 rue Taitbout
75 436 PARIS cedex 09

PUBLIC HEARING
ANTI-MONEY LAUNDERING AND TAX EVASION:
WHO ASSURES COMPLIANCE WITH THE RULES AND ENFORCES
THEM?
MONDAY, 14 NOVEMBER 2016
15.00 - 18.30
Room: Jzsef Antall (JAN) 4Q2)

CONTRIBUTIONS

Speaking Points
Simon Riondet (EUROPOL)
On 3rd of April 2016 the International Consortium of Investigative Journalists (ICIJ) revealed the
existence of leaked data from the internal servers of law firm Mossack-Fonseca. The data that the
release referred to was leaked approximately one year before its existence was revealed to the
public in a simultaneous exercise involving tens of media outlets and hundreds of journalists.
The initial media release was focused on high value media targets, like political actors, business men,
big corporations and celebrities.
The amount of data being leaked is reportedly in the area of 11.5 million files (approximately 2.6
Terabits of storage space), spanning for approx.40 years, from 1977 till 2015, and containing
references to hundreds of thousands of legal and natural persons. Hereafter we will refer to this
data as the Panama Papers data.
On 9th of May 2016, ICIJ made available to the public a database containing almost 320000
companies that are part of the so called Panama Papers leak and an earlier similar event called
OffShore leaks. The database is available for online queries but also for download for offline use.
Hereafter we will refer to this database as the Panama Papers database.
The exact process of constructing the Panama Papers database is not clear as it seems ICIJ used
some internal administrative and log files belonging to Mossack-Fonseca and is not the results of the
analysis of the overall 11.5 million leaked files. Though random checks against this database it was
established that some entities who were previously linked by the media with the Panama Papers
leak do not appear in the database raising questions concerning the amount of data available for
queries. Furthermore there is no information available concerning bank accounts, means of
communications or other contextual information.
Nevertheless Europol downloaded the Panama Papers database and did a check against its own
databases for detecting common entities. Europol does not possess at this moment the entirety of
the leaked data and all the queries with our partners about this data returned negative so far.

Results of the checks:


-3469 probable hits
-Country packages are ready to be sent out. Countries need to asses and confirm the hits!
Many links with organized crime groups were identified. Not surprisingly the economic crimes
focused FPs scored very high in the number of hits with FP Sustrans having the lead with 1722 hits,
FP MTIC (3rd place) 388 hits, Smoke (4) 260 hits and Asset Recovery (5) 207 hits.

Surprisingly FP EEOC scored the second highest number of hits with 516 hits, maybe suggesting an
affinity of Russian speaking OCG towards using the services of Mossack Fonseca firm.
Worrying is the presence of FP Hydra, the dedicated FP for Islamic terrorism on number 6 with 116
hits.
1722

SusTrans FP
EEOC FP
MTIC FP
Smoke FP
Asset Recovery FP
Hydra FP
Cola FP
Furtum FP
Copy FP
Cyborg FP
Synergy FP
Checkpoint FP
GNST FP
Apate FP
Phoenix FP
Cannabis FP
Firearms FP
Dolphin FP
Terminal FP
TFTP FP
Heroin FP
Copper FP
Non Focal Point
ITOC FP
Soya FP
Travellers FP
Sports Corruption FP
Twins FP
Monitor FP

516
388
260207
116 99 89 86 83 83 82 82 80 52 49
46 31 28 22 20 15 15 10 9 9 6 6 4

The scope of the off shore companies registered by Mossack Fonseca exceeds their beneficiaries
privacy concerns or tax frauds attempts. The main point here is that we can link companies from the
Panama Papers leak not only with economic crimes like money laundering or VAT carousels but also
with Terrorism, Russian OCGs, Drug Trafficking, THB, Illegal Immigration, Cyber Crime.

As per the country providing the information generating the hits the UK scored highest (1377 hits)
but this could be tied with the fact they are the main quantitative data (STRs) contributor to FP
Sustrans. Lithuanian 3rd place can also be linked the strong presence of Russian speaking OCGs
within the leaked data.

1377

United Kingdom
France
Lithuania
Belgium
Germany
Spain
Netherlands
Romania
Hungary
Bulgaria
Switzerland
USA
Norway
Italy
Cyprus
Austria
Latvia
Sweden
Poland
Canada
Finland
Slovak Republic
Czech Republic
Denmark
Portugal
Slovenia
Ireland
Malta
Other

447
408
301
236196195
140110 97 92
89 66 54 51 44
36 36 31 26 25 25 24 22 20 19 18 15 15

Just days after the Panama Papers data was revealed in the media, Europol proactively asked (Siena
ref. 1190712-1-1) all our partners if they opened or intend to open investigations in relation to the
Panama Papers. A few countries replied positively while many more showed willingness to start an
investigation depending on the availability of the data.
Unfortunately the released Panama Papers database and the media reports are not enough in many
countries to start formal investigations and the refuse of ICIJ to provide the entire set of data hinders
many investigations.
Europol is also not in possession of the Panama Papers data. Once in its possession we could be able
to embed it in our regular data flows and procedures and this would result in a systematic
exploitation of a wealth of new intelligence which could constitute breakthroughs in many
investigations that were previously hindered by the secrecy associated with most of the Off-Shore
companies.

EK KANAL
Norbert Naulin

Ausgangslage

Ausgangslage der EK KANAL ist ein Datenankauf des


Landes NRW, vertreten durch Ermittlungsbeamte des
Finanzamtes fr Steuerstrafsachen und Steuerfahndung
Wuppertal, von einem Informanten.
Die Daten beinhalten Erkenntnisse zur Vorgehensweise bei
Grndung/Erwerb von Offshore-Gesellschaften und Daten
zu den tastschlich wirtschaftlich Berechtigen einer
Offshore Gesellschaft.
Norbert Naulin

Ausgangslage
Was beinhaltet das Material des Informanten:
-

Grndungsurkunden
Beschlussbescheinigungen
Protokolle der Vorstandssitzung
Vollmacht/Power of Attorney
Auszug Aktienregister
Rechnungen fr Grndung und laufende Gebhren
Backgroundinformationen des Informanten
E-Mails zwischen Banken/Vermgensverwaltern etc. mit
Mossack Fonseca
Norbert Naulin

Ausgangslage
Erkenntnisse aus dem Material des Informanten:
-

Namen der beneficial owner


Name der Offshore-Gesellschaft
Sitz der Offshore-Gesellschaft
Namen der offiziellen Direktoren, Vorstandmitglieder und
Shareholder (= Angestellte der Kanzlei Mossack Fonseca)
Namen der Banken, Vermgensverwalter etc und ihrer
Anlageberater, die fr den Beneficial Owner die Grndung der
Offshore-Gesellschaft bei Mossack Fonseca veranlassten.

Norbert Naulin

Ausgangslage
Erkenntnisse aus dem Material des Informanten:
In keinem einzigen Fall hat ein beneficial owner selbst den Kontakt zu
Mossack Fonseca aufgenommen
Es waren immer Banken oder andere Finanzdienstleister, die dies fr
ihre Kunden getan haben. An diese wurden auch die Kosten fr
Grndung und Unterhalt der Offshore-Gesellschaft in Rechnung
gestellt. Diese fakturierten dann weiter an ihre Kunden im Rahmen der
Abrechnung ihrer gesamten Dienstleistungen.

Norbert Naulin

Ausgangslage
Erkenntnisse aus dem Material des Informanten:

Veranlasste eine Bank fr ihren Kunden die Grndung der OffshoreGesellschaft, so durfte der Kunde diese Gesellschaft nur gegenber
dieser Bank verwenden.
Wechselte der Kunde die Bank, so wurde die Offshore-Gesellschaft
gelscht. Eine Kontenerffnung bei einer Drittbank unter Nutzung der
Offshore-Gesellschaft war ausgeschlossen.

Norbert Naulin

Ausgangslage
Erkenntnisse aus dem Material des Informanten:
Die ffentlichkeit und die Behrden sehen nicht, wer der eigentliche
Eigentmer, der benficial owner, ist.
Die power of attorney ist ein internes Dokument. Sie sichert das
alleinige Bestimmungsrecht und die Verfgungsgewalt ber das
Vermgen zugunsten des beneficial owner. Dies kennen
der beneficial owner
Mossack Fonseca
die Bank und/oder der involvierte Finanzdienstleister

Norbert Naulin

Verdachtslage
Einfache Fragestellung:
Wozu kann die Offshore Gesellschaft genutzt werden?

Antwort:
Delikte der Allgemeinkriminalit/Vortaten 261 StGB und
Steuerhinterziehung 370 AO

Norbert Naulin

Ermittlungsfhrung

Norbert Naulin

Tatverdchtige
- Verantwortlich handelnde Personen der Kanzlei
Mossack Fonseca wegen Verdacht der Geldwsche und
Beihilfe zur Steuerhinterziehung
- Verantwortlich handelnde Personen der involvierten
Banken und Finanzdienstleister wegen Verdacht der
Geldwsche und der Beihilfe zur Steuerhinterziehung
- Die identifizierten beneficial owner wegen des
Verdachts einer Vortat zur Geldwsche oder der
Steuerhinterziehung.

Norbert Naulin

Beteiligte Behrden

Staatsanwaltschaft Kln
Landeskriminalamt Nordrhein-Westfalen, Dez. 13 und 14
Oberfinanzdirektion NRW mit Fahnder/innen aus allen
zehn STRAFA-F unter Leitung EOKS

Norbert Naulin

Ermittlungsziele I
Ermittlung der unter Verwendung einer Offshore
Gesellschaft begangenen Straftaten und der hierfr
verantwortlich handelnden bzw. hierdurch begnstigten
Personen mit den Zielen der
- strafrechtlichen Sanktionierung,
- der Festsetzung und Erhebung verkrzter Steuern,
- der Vermgensabschpfung.

Norbert Naulin

Ermittlungsziele II
Ermittlungen zur Art und Weise der Tatbeteiligung von
Banken, Vermgensverwaltern, Anwaltskanzleien etc.
sowie Identifikation der handelnden natrlichen Personen
auf dieser Ebene und ihrer Tatbeteiligung. Ziele der
Ermittlungen sind
Sanktionierung und Abschpfung der
juristischen Personen (OWiG),
Sanktionierung der natrlichen Personen.

Norbert Naulin

Vorgehensweise
Die durchzufhrenden strafprozessualen Manahmen
richteten sich gegen alle beteiligten natrlichen und
juristischen Personen, die ber einen Wohnsitz/Sitz im
Inland verfgten.
Soweit in einzelnen Fllen Manahmen im Rahmen einer
Rechtshilfe mglich waren, so erfolgten auch solche im
Ausland.

Norbert Naulin

Bisherige Erkenntnisse
In ber 90 % der Flle handelt es sich um
Steuerhinterziehung und Beihilfe zur Steuerhinterziehung.
Ein Motiv in vielen Fllen war es, die EU-Zinsrichtlinie vom
03.06.2003 zu unterlaufen, denn wenn ein Konto/Depot auf
eine juristische Person mit Sitz auerhalb der EU
eingerichtet war, so entfiel der Einbehalt der
Zinsabschlagsteuer.
Die Beihilfe zur Steuerhinterziehung stellt sich als eine
systemische Beihilfe der Finanzdienstleistungsbranche dar.
Norbert Naulin

Vielen Dank fr Ihre Aufmerksamkeit.


Norbert Naulin
Regierungsrat
Norbert.Naulin@fv.nrw.de
Norbert Naulin

October 31, 2016


Ref.no. 16-1625964

Ministry of Taxation
Nicolai Eigtveds Gade 28
DK 1402 Kbenhavn K
Tel. +45 33 92 33 92
Mail skm@skm.dk
www.skm.dk

Dear Mr Wets,
In response to your email of October 17th, 2016 I hereby have the pleasure of
sending you the information that the Danish Ministry of Taxation is able to provide you regarding the Danish purchase of information from the so-called Panama Papers.
On September 6th, 2016 the Danish Minister for Taxation informed the Danish
Parliament that according to the political agreement of May 4th, 2010 between the
Government at the time (the Liberal Party and The Conservative Party) and the
Danish Peoples Party, the Socialist Peoples Party, the Social Liberal Party and
the Liberal Alliance in relation to the Danish temporary program on the reduction of sentences for breaches of the laws on tax and indirect tax regarding funds in foreign accounts, the
Danish Minister for Taxation will, if Denmark is offered information about accounts or similar matters from sources other than other countries tax authorities,
consider on a case-by-case basis whether to accept such an offer, including
whether to accept a request for a set payment for the information. The possibility
of receiving information according to this agreement would only be enacted in relation to countries etc. from which Denmark was not able to obtain bank information as of January 1st, 2008.
An anonymous source offered the Danish Tax Authority (SKAT) to purchase
information regarding 320 cases from the Panama Papers related to Denmark that
were thus considered of relevance for Danish taxation. It was estimated that the
information concerned between 500 and 600 Danish taxpayers. The offer was
within the scope of the abovementioned political agreement, and SKAT therefore
presented the offer to the Danish Minister for Taxation.
After having discussed the offer with political parties in the Danish Parliament,
the Danish Minister for Taxation followed their recommendation and gave SKAT
permission to enter into negotiations with the source with a view to purchasing
the information.

SKAT reviewed a sample of the information, which was received at no cost. On


that basis, it was the assessment of SKAT that the information was sufficiently
relevant and valid for tax investigations to be undertaken regarding a number of
the companies and persons mentioned in the information.
In his briefing of the Danish Parliament, the Danish Minister for Taxation stated
that a purchase of leaked information will always involve a number of difficult
considerations and therefore SKAT should remain reticent in these matters.
Whether to purchase information would thus always be subject to a balance of
considerations to be made on a case-by-case basis. Nevertheless, in light of the serious nature of the Panama Papers, the Danish Minister for Taxation agreed with
the other Danish political parties that the purchase of information was necessary
in this instance.
On September 29th, 2016 the Danish Minster for Taxation informed the Danish
Parliament that SKAT had concluded the negotiations with the source and had
purchased the information concerning 500-600 Danish tax payers for approximately DKR 6 million.
The Danish Minister for Taxation informed the Danish Parliament that on this
basis SKAT would now undertake tax investigations of the companies and persons mentioned in the information.
I hope you find this information helpful.

Yours sincerely

Christian Stenberg

Head of Department
International Coordination
The Danish Ministry of Taxation

Side 2 af 2

PUBLIC HEARING
ANTI-MONEY LAUNDERING AND TAX EVASION:
WHO ASSURES COMPLIANCE WITH THE RULES AND ENFORCES
THEM?
MONDAY, 14 NOVEMBER 2016
15.00 - 18.30
Room: Jzsef Antall (JAN) 4Q2)

REPLIES TO WRITTEN QUESTIONS

Replies to the written questions from Giovanni Kessler, DirectorGeneral of the European Anti-Fraud Office (OLAF)
1. Did OLAF decide to open investigations following the revelations of the
Panama Papers and the Bahamas leaks? If yes, could you please indicate how
many files were opened? How many closed? Could you provide us with the
estimated or real outcome of these investigations? What would be the impact
on the EU budget?
On the basis of an analysis of information related to the Panama Papers and of
information obtained from other sources, OLAF has opened four investigations. As all
of these investigations are still ongoing and the confidentiality obligations have to be
respected, OLAF cannot provide the PANA Committee with more information.
2. Did OLAF make an assessment of its potential role in the coordination of
national investigations? If yes, could you please share with us your
conclusions?
As a general rule, OLAF does not coordinate national investigations concerning money
laundering or tax evasion. OLAF regularly supports national authorities in so-called
"coordination cases" in relation to OLAF's mandate to investigate crimes against the
financial interests of the EU. In such cases, OLAF does not carry out investigative
activities itself. From an investigative standpoint, OLAF could do more regarding the
coordination of national investigations if its mandate in relation to VAT fraud was
clearer.
3. How do you consider the mandate of OLAF corresponds with the mandate of
PANA?
OLAF investigates fraud against the EU budget (crimes against the financial interests
of the EU) and serious misconduct by staff and members of the European institutions,
therefore OLAF analysed the Panama Papers with a view of uncovering information
that would fall within its mandate. While money laundering, tax evasion and tax fraud
as such do not fall under OLAF's mandate, money laundering could potentially be
linked to the hiding of proceeds of crimes against the financial interests of the EU.
Therefore, these are issues where OLAF and PANA could have common interest for
action. Should the works of the PANA committee uncover further information of
potential investigative interest for OLAF, the PANA members are invited to submit this
information to OLAF.
4. Could you please indicate the amount of human resources dedicated to AML
and Tax evasion in OLAF?
Given that anti-money laundering and tax evasion do not fall within OLAF's mandate,
OLAF does not have specifically dedicated resources. However, OLAF resources are
regularly used for cases that do involve money laundering or tax evasion in the context
of fraud with EU funds or of serious misconduct of EU staff or members.
5. Did OLAF receive complaints/ information on similar cases than those
revealed in the Panama Papers? If yes, could you please indicate how many
complaints were received? Did OLAF do any follow up?
OLAF receives information of investigative interest from a variety of sources, private
and public. OLAF may open investigations based on the allegations it receives, but can

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also look into particular issues on its own initiative, including for instance media
reports of alleged fraud with European Union funds. Please see reply to question 1 for
the investigations opened in the context of the Panama Paper revelations.
6. Could you please explain how OLAF collaborates with EBA, EUROPOL,
EUROJUST, national FIUs, and National tax authorities on AML and tax fraud
cases?
As far as offences affecting the EU's financial interests are concerned, OLAF cooperates
with Eurojust and Europol on the basis of administrative arrangements dating back to
2004 and 2008, respectively. OLAF also cooperates with national authorities and
bodies having concluded a number of bilateral administrative arrangements in this
field. There is limited cooperation with national tax authorities due to the lack of an
appropriate legal framework.
7. What is your opinion about the virtual currencies? Bitcoins, for example, are
well-known for their 'money-laundering' possibilities. How do you think this
issue should be addressed?
OLAF has no experience with fraud involving virtual currencies. In general, we urgently
advocate for more transparency of financial information. That would enable OLAF to
trace the proceeds from fraudulent activities, money which often helps finance
organised crime. It is suggested to have standardised, interconnected, easy- to-use
national bank account registries, available to all EU enforcement agencies.
Knowing bank accounts are traceable would have a powerful deterrent effect for
individuals using these to pay bribes. Traceability would also increase detection rates
concerning fraudulent activities and would enhance the possibility of control.
Moreover, it would ensure consistency of investigations, as OLAF would be able to
operate equally effective regardless of the European country the Office would be
operating in.

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Replies to the written questions from Simon Riondet,


Representative of EUROPOL and FIU Network

1. What are the main legal or practical obstacles EUROPOL is facing when
dealing with AML and tax fraud cases, such as those revealed by the Panama
Papers, especially with regard to access to information inside and outside
the EU?
-Legal: An improvement would be that the Europol convention allows it to exchange
data directly with multinational private parties (Major International Banks, Western
Union, MoneyGram, PayPal, etc.) for the purposes of international Money Laundering
and Terrorist Financing Investigations. The envisioned system (2009/371/JHA) only
allows Europol to receive private parties data via a particular MS, a problem when the
information relates to multiple countries since most MSs do not accept to provide to
Europol information linked to other MSs.
-Practical: Europol only receives scattered information for MSs. MSs Police decide if
and when to contribute cases to Europol no minimum threshold is decided. This issue
is more pressing regarding bulk contributions from FIUs and cash seizures from
Customs. Currently only UK, Ireland, Netherland, Belgium, Denmark, Hungary, Cyprus
and Slovakia provide regularly STRs to Europol and only Spain, Italy, Ireland, UK,
Netherland, France, Austria and USA are regularly contributing bulk Cash Seizures.
Europol needs to expand the Pan-European platform for STRs and Cash Seizures until
all 28 MS FIUs and Customs Services are providing Europol with bulk contributions of
their internationally connected cases.
2. Did EUROPOL decide to open investigations following the revelations of the
Panama Papers and the Bahamas leaks? If yes, could you please indicate how
many cases were opened? How many closed? Could you also please indicate
the estimated or real outcome of these investigations?
Europol requested from all partners information on on-going or planned investigations
following the Panama Papers leak while at the same time proposing investigative
support. Several countries provided positive replies but extremely limited operational
data was provided to Europol so far.
While Europol is not yet in possession of the Panama Papers data we used the publicly
available Panama Papers database, from the ICIJ website, for checks against our
internal databases. The checks resulted in a few thousands possible hits that were
grouped in country packages for dissemination to all interested partners.
At this moment we are not aware on the exact number of investigations as there are
differences in how different countries approached the investigations, while other
countries are still assessing the option of opening investigations. The situation is still
dynamic and with multiple investigations on-going is not possible to make a proper
estimate on their outcome.
3. Without entering into the details of specific cases, could you please briefly
describe the main schemes that were used to hide tax revenue or launder
money? Would there be a typology in the schemes used or do your
investigations reveal that each case is specific?
- The use of Offshore/Tax havens jurisdictions by criminals to take advantage of the
existing lack of transparency regarding the ownership of the assets that ensured by
strong professional secrecy laws (banking and legal) and practices of strong

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administrative secrecy that prevent international exchange of information about the


real owners of funds
-The use of corporate service providers by criminals to acquire large numbers of shell
companies (including finding third parties for positions within the company) located in
Offshore/Tax havens (usually under the form of holding companies or Trusts - bearer
share companies are the preferred) and to open offshore bank accounts
(anonymous/numerical are the preferred) controlled by such companies.
-Then Ill-gotten funds are sent to Offshore/Tax havens jurisdictions to be laundered
(layered) before integration, usually one of two techniques is used:
-Bulk cash is transported by cash couriers to offshore locations and deposited (placed)
in especially prepared receipt accounts (anonymous/numerical are the preferred)
-An onshore bank receives funds and transfers them to the offshore bank especially
prepared receipt accounts using a correspondent banking, usually a payable through
account. From the receiving offshore bank account funds are transferred again, to
bank accounts belonging to the shell companies.
-At a latter stage money is no longer transferred, but instead the offshore companies
that own the bank accounts or properties are. Complex networks are created and the
transmission of value can be done through the holding company instead of the resident
company. Company shares are bought and sold or just detained (bearer bonds) by
someone who appears to be the real owner but is in fact just a trustee or a frontmen.
4. Could you please explain how the cooperation between police work within the
EU works? Would you describe this as effective? Are you encountering legal
or practical obstacles in this cooperation? Would you have any suggestions to
improve the cooperation between the police within the EU?
-Currently within the EU there are no major legal obstacles to International Police
Cooperation. International Police Cooperation has increased steadily over the years
(insert SIENA numbers e.g. 740000 messages last year) but there are still issues
that need to be addressed like some lack of trust between different countries and
agencies and the existence of language barriers and diverging priorities. We need to
continue to take down these barriers in order to increase the cooperation and make
sure that the use of Europol and Eurojust channels are the standard and not the
exception.
5. How do EUROPOL or FIUs cooperate with other enforcement authorities in the
EU? Would you describe this as effective? Are there any legal or practical
obstacles to this cooperation? What would you suggest to improve the
cooperation with other law enforcement services?
Various international instruments, legislation and platforms exist to facilitate
international cooperation between FIUs, however these do not encompass FIUs ability
to cooperate with non-FIU counterparts for purposes of criminal law-enforcement work.
Greater exchange of information between FIUs and other agencies would assist in
valuable STRs reaching those tasked with criminal investigations.
Europol notes that significant barriers in the fight against money laundering, terrorist
financing and the pursuit of financial investigations more general remain the often
fragmented cooperation and national and international levels, and lack of interoperable
databases.
Legal obstacles at the national and international level for direct cooperation of the FIU
with Europol/ other non-FIU counterparts need to be addressed. The symmetrical
exchange of information between FIUs may prevent crucial information
contained in STRs reaching those tasked with criminal investigations. Europol

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could assist in overcoming this barrier through acting as a pan-European hub for STRs
enabling information to be integrated with other sources stemming from multiple
agencies across Europe and beyond.
On 1st January 2016, FIU.net (a system conceived to facilitate FIU to FIU information
exchange) was embedded in Europol which is foreseen to further close the
financial intelligence gap in the EU and create more synergy between all the EU
communities dealing with financial intelligence in the EU.
However, several legal and resulting technical barriers prevent and/or
significantly delay improved cooperation with the FIUs. Several FIUs are not
allowed at the moment by their national legal framework to match/exchange data
directly with foreign law enforcement (exchanges can only be FIU to FIU).
6. Would you say that some member states devote significantly less resources
to enforcing AML legislation and detecting money laundering or tax evasion
activities than other member states (relative to the size of their financial
sector)?
Europol cant comment on the resources dedicated to combatting money laundering.
It is neither our role, nor do we dispose of necessary information to make any
assessment. However, Europol is aware that a common problem across member
states in tackling money laundering and conducting financial investigations is
lack of resources/ expertise1.
While we cannot offer explanation for the reason why, figures held by Europol around
STR reporting volumes across the EU show that two countries alone account for 67%
of all reports filed in the EU: the UK and the Netherlands 2. Reporting figures across
the EU do not always appear to be commensurate with the activities of the
regulated sector in particular jurisdictions: notably Cyprus and Malta and
Luxembourg receive very few reports given the significance of these
jurisdictions in offshore financial services and the online gambling industry.
Furthermore, the vast majority of reports filed with Luxembourg stem from a single
electronic bank/payment service provider, in spite of the fact that other sectors, such
as private banking and offshore financial services, offer significant scope for money
laundering activities and tax crimes. Furthermore, 38% of all STRs filed with FIUs are
triggered by the use of cash; however Luxembourg, where cash issuance is almost
double its GDP, is one FIU which does not report the use of cash as a common reason
for reporting.
Europol Siena statistics show that UK, Netherlands, France, Belgium and Spain
co-operate the most on the topic of money laundering using Europol channels.
7. Figures tend to show that shell companies usually have a short lifetime. Could
you please explain why? What is according to your experience the normal
lifetime of a shell company?
-If a shell company is being used to commit a crime or to receive criminal funds without
any laundering it will indeed have a very short lifetime (usually form 90 days to 6
months). In such cases criminals continuously purchase and use new shell companies
1

Final report on the fifth round of mutual evaluations- "Financial crime and financial investigations"
UK FIU may be the recipient of some of the highest reporting volumes in the EU as it is one of the largest
financial markets in Europe and operates a Suspicious Activity Regime. Reporting volumes in The Netherlands
are anomalously high and can be explained by way of the fact that they do not receive STRs, but rather Unusual
Transaction Reports (UTRs), the vast majority of which stem from exchange/remittance institutions who are
obliged to report all transactions in excess of 2000 Euros.
2

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form corporate service providers to make sure they can be used as intermediate legal
persons to conceal the true owner of such funds.
-If a shell company is on the other hand being used to stockpile funds in an
Offshore/Tax havens after being laundered it will then have a much longer lifetime. It
will exist and operate until it is needed by the criminal or until it is detected by LEAs.
8. What was the role of banks and financial intermediaries that worked with
Mossack Fonseca or in similar cases? Which conclusions would you draw on
the role of - on the one hand- advisors and - on the other hand- banks?
This is connected to question 9 below. We cannot comment specifically on the role of
banks and financial intermediaries that worked with Mossack Fonseca, since we are
not involved in investigations, however the MO of using opaque structures to launder
is familiar to Europol. In these instances, financial intermediaries either knowingly or
negligently fail to comply with rules concerning the identification of beneficial owners.
In turn, banks move funds through the financial system where they cannot be aware
of the origin or intended recipients of funds, accepting the intermediarys identity as
that of the beneficial owner.
9. On the basis of your experiences should the regulations on tax advisors and
auditors be strengthened? Should the regulations on banks and financial
intermediaries be strengthened? If yes, would you have suggestions on how
this should be done? Would you describe the rules in place as sufficient?
Would you think there is a problem in the implementation or law
enforcement?
-Regarding beneficial ownership: In principle the problem of beneficial ownership will
be theoretically solved in the context of the new 4th AML. However in practice one will
have to see how this will work (will obliged entities be capable to identify the real BO,
will LEAs have quick access to this info, will LEAs be able to share this info
internationally).
-Regarding correspondent banking: This issue, essential issue when dealing with the
remittance of funds to Offshore/Tax havens, could be made clearer and stricter. In
correspondent banking relations with Offshore/Tax havens included the EU black list
only two possibilities should clearly exist:
- If the correspondent bank provides quick and precise information to the EU bank
on who is the BO (full ID document), what is the source of the funds, what is his
line of business and what is his transaction history the correspondent banking
relation is authorized to continue.
- If the correspondent bank does not provide all this information the
correspondent banking relation would have to cease.
10.The current AML legislation in place in the EU (and worldwide via FATF
standard) already require obliged entities (usually, but not exclusively
banks/ financial institutions) identify the ultimate beneficial owner, and
make this information available to competent authorities and financial
intelligence units (FIUs). Clearly the revelations in the Panama papers
demonstrate that some financial institutions and other intermediaries have
not only not met this obligation, but some have actively helped to conceal this
information from competent authorities/FIUs. Would you consider these to
be individual cases, which should be for law enforcement bodies and justice
departments to follow up; or do you rather consider this a systemic failure by
EU Member States to implement and enforce existing law?

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-In the EU, as mentioned before, the issue of BO should be solved and the issue of
correspondent banking regulated (even if improvements can be done). In the EU if any
financial institutions or intermediaries violate their obligations tools are in place to act
and to punish them.
-Outside of the EU (exceptions to US, Australia, and some other jurisdictions) the
situation is much more serious (FATF standard recommendations are not always
respected - especially in Offshore/Tax havens). This issue can only be solved via a
political stance on those countries to respect FATF standards, the decision to close
correspondent banking relations (with any non-complying entities) and increase
customs cash controls on borders upon departures/arrivals from such jurisdictions.
11.What is your opinion about the virtual currencies? Bitcoins, for example, are
well-known for their 'money-laundering' possibilities. How do you think this
issue should be addressed?
In spite of the changing face of criminality, with significant threats now stemming from
new technologies, money laundering schemes detected by law enforcement are still
largely characterised by traditional techniques, in particular the use of cash
and opaque structures.
The possibilities to launder the proceeds of crime using virtual currencies have recently
attracted much attention, however, there is limited evidence to show that virtual
currencies are a preferred or widespread method for money laundering.
Possibilities to launder money using virtual currencies are limited and require cashing
in and out (in cash in order to entirely break the trail). But, as the network of virtual
currency accepting merchants and list of goods and services which can be paid for
using virtual currencies expands, so too does the risk of the emergence of criminally
controlled merchants, accepting virtual currency, who can effectively operate online
businesses in the same way as cash front businesses to legitimise the source of income.
This scenario would eliminate the need to cash in or out, as income and expenditure
could take place within a closed system which does not interact with real world
finances.
Nonetheless, virtual currencies underline an emerging problem the increasingly
global and virtual nature of financial services: the growing demand for online
services and related internet payment systems poses considerable challenges to the
EU policies concerning money laundering and terrorist financing. The impact of new
technologies on the financial system and the development of borderless virtual
environments call for reflection on how to adapt policies which are meant to be
supervised only at national level, while the underlying business is already
transnational and globalized in its own nature: there is an urgent need for a
supranational overview.

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Replies to the written questions from Klaus Meyer-Cabri,


representative of EUROJUST
1. Could you please briefly explain the way EUROJUST works in particular on issues related
to AML and tax evasion?

Eurojust is the EUs judicial cooperation unit. Its mandate is to stimulate and improve the
coordination of investigations and prosecutions as well as the cooperation between the
competent judicial authorities in the Member States in relation to serious cross-border crime.
Tools:
o Coordination meetings at Eurojust are designed to bring together the judicial and
law enforcement authorities of the involved countries to facilitate the exchange of
information, support mutual legal assistance measures, coordinate ongoing
investigations and prosecutions and to detect, prevent or solve conflicts of jurisdiction
or ne bis in idem-related issues.
o Eurojust s coordination centres facilitate the exchange of information among
judicial authorities in real time and enable direct support towards the coordinated,
simultaneous execution of, inter alia, arrest warrants, searches and seizures in different
countries.
o In addition, Eurojust supports Member States in the setting up, running, financing and
evaluation of Joint Investigation Teams (JITs).
Money laundering as a transnational offense requires a coordinated response across multiple
jurisdictions. Eurojust sees an constant and steady increase in its money laundering cases:
In 2012: 148 money laundering cases; in 2013: 202 cases; in 201: 221 cases; in 2015: 285 cases. By
31 October 2016, Eurojust registered already 232 cases related to money laundering.

Money laundering frequently appears as a cross-cutting offence and is linked with most of the
Eurojust crime priorities, in particular fraud, corruption, involvement of OCGs and drug trafficking.
However, money laundering also appears as a stand-alone offence in a number of cases.
In 2015, Eurojust held 55 coordination meetings and three coordination centres related to
money laundering. In the first ten months of 2016, Eurojust has already organised 57 coordination
meetings and two coordination centres to tackle crimes including money laundering.

There is no specific crime type tax evasion in the Eurojust Case Management System (CMS).
However, a search was conducted for fraud cases with the key words tax evasion in the Brief
Case summary field in the CMS and it could be established that most such cases are registered
under crime type VAT fraud or Other types of tax fraud.
o VAT fraud: In 2012, 60 VAT fraud cases were registered at Eurojust. In 2013, this
number has increased to 89 cases. A substantial increase can be noted for the year 2014
with 142 VAT fraud cases registered at Eurojust. In 2015, there was a decrease to 97
such cases. In the first 10 months of 2016, 83 VAT fraud cases were registered.
Another search was conducted to see in how many VAT fraud cases the crime type
money laundering was ticked in the CMS as associated crime type. In 2014, 34 out of
142 VAT fraud cases (24%) had money laundering as associated crime type. In 2015, it
was 13 out of a total of 97 VAT fraud cases (13%). In 2016 (until 31 October 2016), 15
out of a total of 83 VAT fraud cases (18%) had money laundering as associated crime
type.
In 2015, 23 coordination meetings and five coordination centres were held at
Eurojust in VAT fraud cases. In 2016 (until 31.10.2016), 11 coordination meetings and
three coordination centres took place in such cases.
o Other types of tax fraud: An increase of other types of tax fraud cases could be noted
in the last years. From 37 such cases in 2012, the number increased to 46 cases in 2013,
55 cases in 2014 and 95 other types of tax fraud cases in 2015. Until 31 October 2016,
64 such cases were registered at Eurojust.

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An additional search was conducted in the CMS for money laundering as associated
crime type in other types of tax fraud cases. In 2014, 13 out of 55 other types of tax
fraud cases (24%) had money laundering as associated crime type. In 2015, in 23 out of
a total of 95 such cases (24%), money laundering was ticked as associated crime type.
In 2016 (until 31 October 2016), 20 cases out of 64 other types of tax fraud cases
(31%) had money laundering as associated crime type.
12 coordination meetings and one coordination centre were held at Eurojust in
2015 in relation to other types of tax fraud cases. In the first 10 months of 2016, nine
coordination meetings took place in such cases.

Case example: Vertigo case (see text box)

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Vertigo case
Operation Vertigo is in its sheer scale and complexity the largest and quite exceptional carousel fraud
case. The OCG behind the criminal activity used a sophisticated infrastructure (buffer companies,
missing traders, companies functioning as alternative payment platforms to facilitate money
laundering and crime-related money transfers) spread over various Member States and a number of
third States, defrauding EU citizens of approximately EUR 320 million in tax revenues.

Several coordination meetings took place at Eurojust between November 2013 and October 2016. The
Czech Republic, Germany, Poland and the Netherlands established a JIT, partly funded by Eurojust.
Eurojust and Europol demonstrated strong collaboration from the early stages of the investigation.
Europol provided extensive analytical support and intelligence sharing.
A coordination centre set up at Eurojust coordinated the judicial response and provided support to the
first common action day in 2015, the goal of which was to disrupt the operation of one branch of the
OCG. As a result, nine suspects were arrested and 26 premises in the participating Member States were
searched.
The second common action day led to the arrest of 14 suspects, including some alleged masterminds,
and more than 40 searches. In parallel, the German, Czech and Polish authorities proceeded to carry out
arrests and searches on the basis of national warrants in the framework of their own national
investigations.
The third common action day focused on searches and interviews of suspects and witnesses who had
been identified mainly based on evidence gathered in the framework of the two previous common
action days. More than 49 searches and 27 hearings of witnesses and suspects were carried out in
Belgium, the Czech Republic, Denmark, France, Germany, Italy, Ireland, Luxembourg, the Netherlands,
Poland, Romania, the Slovak Republic, Spain, Sweden and the UK.
The fourth common action day focused on the arrest of the top level of the OCG. In 12 countries, 18
arrests were made, 3 freezing order/seizures orders were executed, 38 searches conducted and 10
witnesses and suspects interviewed. More than 570.000 GBP were seized.
Europol deployed a mobile office at all four Eurojust coordination centres, which allowed direct access
to Europols databases for cross-checking and analysing data and facilitated real-time information
exchange. Eurojust facilitated the handling of MLA requests, EAWs, searches, seizures and hearings on
the spot.

Legal and practical issues


The key challenge was the modus operandi of this OCG, particularly the way in which the OCG
managed the payments, making use of so-called alternative payment platforms to facilitate crimerelated money transfers and associated money laundering. This method allowed the OCG to spread
its activities across the globe, for example by placing the tool for managing payments in one country
while the bank account of the alternative payment platform was located in another country.
Furthermore, the masterminds behind the fraud could reside anywhere, without being limited by
the ongoing criminal activities, meaning that any action on the part of the investigating authorities
would require them to cross the border of their own jurisdiction, necessitating international
cooperation.
The size of the investigations also necessitated cross-border cooperation. In Germany alone, more
than 600 MLA requests were issued.
Due to the large scope of the criminal activities, a number of investigations had been initiated in the
affected States. Facilitating and coordinating effective judicial cooperation in this setting required
that all parallel investigations were identified.

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Lessons learned
Despite the links discovered to most Member States, a decision was made to focus the Eurojust case
on the main States involved. The effectiveness of a dynamic JIT composed of only four Member States
was considered more important than establishing a more inclusive but perhaps less flexible JIT.
The notification of MLA and requests made among JIT partners to Eurojust was done for requests to
be executed during the action days. Future cases could profit from this.
To prepare an action day, a coordination meeting at Eurojust was held six weeks before the
envisaged date. At least one month before this coordination meeting, notifications about the targets
or, if possible, drafts of the MLA and JIT requests were distributed via the National Desks of the
involved countries, for the purpose of collecting and verifying data concerning the targets, prior to
issuing a domestic court order. In this fashion, a more expedient execution of MLA requests can be
achieved and sufficient time can be allocated to prepare the final MLA requests and the necessary
translations, as well as the execution of the requests during the action day.
Four coordination centres were necessary due to the scope of the case and the actions needed and
also allowed the national authorities to focus on a certain level of perpetrators or measures each
time.
During the coordination centres at Eurojust, direct communication without necessarily having to first
go through the respective National Desks (for example, Dutch authorities communicating directly
with the representative of the Eurojust German or Spanish Desk and vice-versa) worked very well,
enabling the handling of an immense number of follow-up measures at very short notice.
Communication and follow-up of MLA requests via the Eurojust National Desks took a great burden
off the national authorities.

Best practice
The early involvement of Eurojust ensures that the authorities competent to execute the MLA
requests are identified at an early stage and that direct contact with these authorities is established.
To prepare an action day, a coordination meeting at Eurojust should be held at least six weeks before
the envisaged date.
Strong collaboration among all parties involved should be ensured at an early stage, which is an
important factor in the success of the investigations. For example, Europol was able to link the
German, Polish, Czech and Dutch investigations. This collaboration, together with the help and
coordination of Eurojust and Europol, were key factors in forming the JIT.
While all States participating in the JIT had previous experience with this judicial coordination tool in
smaller scale cases, the present case convinced the JIT participants that large-scale cases can equally
be handled more efficiently through JITs.
A form has been created, which is used among JIT members to keep track of requests made and
evidence exchanged.
While Eurojust coordination centres to date have offered a complementary service to national
coordination efforts during action days, the coordination centres set up in this case acted as the sole
point of coordination of the actions in the main participating States. This case demonstrates that
Eurojust can perform the full range of tasks involved in a large-scale multilateral action day. The
active participation of the national authorities ensured the smooth flow of information between the
Eurojust coordination centre and the authorities responsible for executing the actions.
The presence at Eurojust of national authorities from participating countries during the common
action days, working together with Eurojust staff in one room, ensures an immediate pooling of
information, which allows for quick judicial responses to new/emerging evidence/information (for
example, new freezing orders, searches), prompt solutions to practical problems and conclusions
from all sides.

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2. What would you consider the main legal or practical obstacles EUROJUST is facing when
dealing with AML and tax fraud cases, such as those revealed by the Panama Papers?

See above text box.


Legal obstacles encountered in the investigation and prosecution of cross-border tax crime:

Delays in the execution of requests for Mutual Legal assistance (MLA)

The execution of MLA requests can be time consuming especially when it involves multiple subrequests (e.g. bank information, tax information, transactions data, details on assets/real estate,
statements of witnesses/suspects, etc.) which different authorities might be competent to execute.
The function of receiving and ensuring the execution of MLA requests is not always allocated to a
single coordinating authority, but to different territorial authorities. Against this backdrop,
difficulties in identifying the competent authorities in other Member States makes it challenging for
the requesting authority to ensure proper coordination and may cause delays in execution.
Likewise, the lack of precision and poor translation of MLA requests may lead to delays in their
execution.
Differences in the judicial systems of the Member States as to the definition and elements
of tax crime (i.e. whether tax crime is criminalized when committed as a positive act, by omission
or both and whether tax crime is dealt with by administrative bodies or by judicial authorities)
hamper the investigation and prosecution of tax crime related cases.

Possible conflicts of jurisdiction

Some Member States are able to prosecute the perpetrators of tax crime even though the fraudulent
actions have been committed in another Member State and even if there are ongoing investigations
in another Member State. The fact that other Member States will only investigate and prosecute tax
offences committed on their territory (i.e. the offence that has been committed in another Member
State can only be considered as an aggravating factor when the suspect is charged for crimes
committed on their territory) poses difficulties for the transfer of proceedings to another
Member State. Moreover, the fact that investigations are ongoing in the requested Member State
can be an impediment to a transfer of criminal proceedings. Additionally, the assessment made by
the requested Member State regarding the nature of the offence in cases where different crimes are
involved (e.g., whether it is considered to be of a purely fiscal nature, or related to a money
laundering offence) may hamper the acceptance or transfer of proceedings.

Freezing and confiscation of the proceeds of crime

Application of the dual criminality test has caused difficulties in enforcing (the recognition of)
foreign freezing orders in tax crime cases. In cases involving the freezing of assets for the purpose of
confiscation at a later stage, some Member States interpret the principle of dual criminality in
concreto. This means that the deed described in the LoR/freezing order must fulfil all criteria of
punishability under the law of the requested state.
Conversely, some Member States believe that interpreting the principle of dual criminality in
abstracto is sufficient in order to enforce coercive measures which can subsequently lead to a
penalty in that case such as confiscation. These states apply so called analogical transposition of
an offence and examine whether the offence described in the LoR /freezing order is punishable in
the requested state regardless of its legal qualification or the existence of possible reasons excluding
punishability.
Delays may arise when the executing Member State initiates its own investigation into money
laundering and freezes the money in the framework of its own investigation rather than pursuant
to the freezing order (or LoR). The requesting Member State must thus wait until that freezing
order is lifted.

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Practical challenges encountered in the cooperation between EU Member States


Such cooperation is resource-intensive both financially and administratively, particularly in very
large scale international cases. For example, the first coordination meeting in relation to the
Panama papers case cost 60.000 Euro (whereas the average cost of a Eurojust coordination
meeting is 8.000 Euro). Maintaining effective communication and coordination also requires
several follow-up meetings (including for example, successive bilateral meetings). As Eurojust is the
only EU agency being able to coordinate the efforts of the national judicial authorities its
capabilities needs to be strengthened as the ultimate goal of any law enforcement activities is to
achieve sound judgements.
Practical challenges encountered in the cooperation with a third State, such as Panama
As regards Panama, there is no EU legal instrument to facilitate MLA and not all Member States
have bilateral agreements in place. The diplomatic channel is slow and complicated; pooling
European resources and expertise is necessary. Eurojust provides a platform for Member States to
adopt a joint approach, so that the prospect of achieving successful cooperation with Panama
would be higher (as opposed to each Member State acting individually).
3. Would you have an overview on the number of judicial proceedings that were opened in
the EU following the revelations of the Panama Papers and the Bahamas leaks? If yes,
could you please tell how many Member States opened judicial proceedings?

Most EU Member States are engaged even if they do not have their own investigations, but only
support other countries by responding to requests for assistance.
4. Could you please explain how EUROJUST cooperates with the judicial authorities of third
countries? Would you describe the cooperation as effective? Are there any countries for
which no cooperation is possible because of legal or practical constraints? If yes, could
you please indicate which countries are concerned? Could you also please explain the
constraints? What would you suggest to improve the cooperation between judicial
authorities within the EU and with third countries?
Eurojust has the following ways to work with non-EU-Member States:

Liaison Prosecutors at Eurojust: Three countries have seconded a Liaison Prosecutor to


Eurojust: Norway, Switzerland and the United States of America. The Liaison Prosecutors
facilitate judicial cooperation between the competent authorities of the Member States and
their country. The Liaison Prosecutors at Eurojust can register their own cases on the basis of
their countries cooperation agreements with Eurojust. Furthermore, they can organise
coordination meetings in complex cases.
Cooperation Agreement: Eurojust (cooperation) agreements have been concluded either on
the basis of Article 26(2) or 26a(2) of the Eurojust Decision. They are used as a basis for the
exchange of personal data. Cooperation agreements were concluded with Norway, Iceland, the
United States of America, Switzerland, fYROM, Liechtenstein, Moldova, Montenegro and
Ukraine.
Contact Points: 39 third States are included in Eurojust s judicial contact point network. Here
of particular interest is the IberRed (Red iberoamericana de cooperacin jurdica
internacional). Eurojust signed a Memorandum of Understanding with IberRed in 2009 and
the National Member for Spain at Eurojust serves as the contact point.

Cooperation with third states, especially with no agreement in place, is more difficult and time
consuming, but not impossible.

5. Criminalisation of tax fraud and money laundering is not harmonised at EU level. Would
you perhaps have any concrete examples of mismatches between national legislations
that impede an effective judicial cooperation?

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An obstacle to effective judicial cooperation can arise when national legislation requires
that the predicate offence for money laundering is precisely established. The reason for
this is as follows. Eurojusts casework shows that OCGs generally diversify their activities;
for example, drug trafficking may be one part of a criminal enterprise which traffics human
beings for sexual or labour exploitation and launders the proceeds. In such cases, the exact
specification of the predicate offence is difficult. Additionally, in some Member States money
laundering is not a prosecutable offence if it is carried out by the person who illegally
obtained the funds, which makes the flow of this illicit money difficult to trace and
investigate. Based on its 10 years of operational experience and the expertise gathered,
Eurojust can provide guidance to Member States facing these and other legal issues.

In addition, the absence of a uniform definition across the EU on predicate offences


means it can be difficult to identify if money laundering is taking place. In practice, this
creates difficulties for the entities charged with preventing transactions related to money
laundering and for Member States in investigating and prosecuting cross-border money
laundering cases. Demonstrating that the predicate offence took place and linking cash to
criminal activities is one of the challenges that law enforcement authorities face. In
addition, self-laundering cases, i.e. where the person laundering the money is the one
who illegally obtained it via the predicate offence, may cause difficulties for some Member
States to establish a prosecutable offence.

There are differences in terms of the confiscation regimes in the Member States, for
example, concerning extended confiscation, non-conviction based confiscation and extended
criminalisation. Differences also exist in connection with the applicable burden of proof.

6. According to your experience what would be the weak spot in the chain of the fight
against ML and tax fraud? Do you think there are legislative loopholes in the law of the
Member States? Would you think there is a problem in the implementation of EU law or
do law enforcement bodies perhaps lack power? Would you consider the tools at the
disposal of judicial bodies to be sufficient? Would you consider the judicial cooperation
between Member States to be effective, and in your opinion does the exchange of
information between judicial authorities work effectively?

As regards judicial cooperation, the tools are in place but they need to be used effectively. This
requires financial and logistical support for example, for coordination meetings and JITs (including
coverage of translation costs). Currently there is a maximum amount of 50.000 Euro per JIT
funding time slot (every 3 months). However, due to the high number of JIT funding applications per
slot there are limitations to the possibility of awarding the maximum amount. Furthermore, in such
large scale international cases, legal and analytical experts are needed within Eurojusts
administration to work on such issues. This requires sufficient budget and staff.
7. Could you please tell how many people are working on AML and tax evasion in
EUROJUST?

All National Desks and Operational-support staff are involved in cases concerning judicial
cooperation and crime types. AML and tax evasion fall within the remit of the Financial and
Economic Crimes Team (FECT) at Eurojust. However, the teams activities are undertaken in
addition to the daily work of its members. The Eurojust Administration, especially the Case Analysis
Unit and the Legal Service, do contribute to the work in this field when required.
8. On the basis of your experience should the regulations on tax advisors and auditors be
strengthened? Would you think the rules on banks and financial intermediaries have to be
strengthened? If yes, would you have any suggestions on how this could be done? In
your views are the rules in place sufficient? Do you consider there to be a problem in the
implementation or the law enforcement?

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As Eurojusts mandate covers the judicial cooperation aspect, this question does not fall within its
mandate.
9. The current AML legislation in place in the EU (and worldwide via FATF standard) already
require obliged entities (usually, but not exclusively banks/ financial institutions) to
identify the ultimate beneficial owner, and make this information available to competent
authorities and financial intelligence units (FIUs). Clearly the revelations in the Panama
papers demonstrate that some financial institutions and other intermediaries have not
only not met this obligation, but in some cases it appears that some have actively helped
to
conceal
this
information
from
competent
authorities/
FIUs.
Would you consider these to be cases which should be for law enforcement bodies and
justice departments to be followed up? Would you consider this a systemic failure by EU
Member States to implement and enforce existing law?

See answer to No 8
10. What is your opinion about the virtual currencies? Bitcoins, for example, are well-known
for their 'money-laundering' possibilities. How do you think this issue should be
addressed?

Eurojust has a dedicated Seconded National Expert for Cybercrime, who has provided the following
statement on the issue of virtual currencies:
The widening criminal use of decentralised virtual currencies and the increased use of so called
tumbler/mixer services, effectively prevent law enforcement and judicial authorities to follow the
money and significantly complicate the possibilities for asset recovery and the prevention of
fraudulent transactions. The lack of (minimum) standards for due diligence and Know-YourCustomer for such services and the non-application of existing regulations compound the problem.
Currently, Bitcoin is the currency of choice for criminals running ransomware and extortion
schemes.

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