The recent Pandora Papers have once again confirmed the importance of whistle-blowers and investigative journalists in unearthing the hidden and illicit activities of the most powerful and wealthy individuals in our societies. As PROTAX Case Studies (D1.2) back in 2018 found, the majority of the high value tax fraud and tax evasion cases are discovered in light of the information disclosed by whistle-blowers and/or journalists, not as a result of traditional law enforcement investigations. This trend underpins the rationale and need for strengthening the protection of press freedom and whistle-blowers.
The types of alleged crimes or illicit activities which emerge from the Pandora Papers are often considered as ‘victimless’ dishonesty crimes whereby it is seldom to find a finite number of victims who can provide information about the perpetrators. Another challenge which is evident in fraudulent schemes is the involvement of professional enablers (e.g., bankers, accountants, lawyers and company formation agents) who facilitate the wealth maximisation of such companies and individuals. This is yet another trend PROTAX has revealed in its case studies (D1.2) and focus groups (D2.3) across Europe. The combination of these factors not only makes it hard to collect court proof evidence for criminal procedure but also underpins the importance of public private partnerships and cross border cooperation in prosecuting those responsible for such malfeasant activities.
What remains to be seen is – as was the case with Panama Papers – if and how many people will be investigated by the law enforcement agencies and brought to justice in the respective countries where these individuals reside, and how much of their ill-gained assets will be recovered. As the vast amount of information contained in the Pandora Papers reveal, there are “35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories, and a global line up of fugitives, con artists and murderers” implicated in these leaked documents. The information has come from 14 offshore services firms from various jurisdictions that set up shell companies and other offshore schemes for clients who want to keep their financial activities and wealth hidden from the public eye and scrutiny from the law enforcement and tax authorities.
Given the above challenges, PROTAX toolkit on tax fraud investigation framework (D7.2) can provide the much-needed harmonised methods to tackle complex cross-border tax offences.
In addition, there is an urgent need for advanced forensic and analytical tools to assist the investigations by law enforcement agencies so that they are able to better identify and follow illicit money trails; to detect and analyse cross-border money flows; to increase efficiency and effectiveness of information sharing among themselves; and to develop durable solutions in compliance with inter alia the rule of law, fundamental human rights. These aspects are all going to be addressed as part of the Horizon Europe funded project TRACE.
 ICIJ – Pandora Papers, The largest investigation in journalism history exposes a shadow financial system that benefits the world’s most rich and powerful, https://www.icij.org/investigations/pandora-papers/.
 ICIJ – Panama Papers, The Panama Papers: Exposing the Rogue Offshore Finance Industry, https://www.icij.org/investigations/panama-papers/.