17 international media, mobilized to dig through this huge mass of information, the investigative team relied on Aleph, a research platform developed a few years ago by the Organized Crime and Corruption Reporting Project (OCCRP), a consortium of international journalists who investigated for over a year from public documents to reveal tens of thousands of offshore companies « managing assets including the value at least EUR 6 500 billion ».
In the country of 614,000, there are more than 140,000 registered commercial companies. Of these, 55,000 are offshore and have assets of 6,500 billion euros, in which the Russian and Calabrian mafias, the Venezuelan regime, LVMH, Kering, KFC, Amazon, the wealthiest French families, such as the Mulils, the Guerrand Hermes or Bernard Arnault, the German owner Holding GmbH H, René Benko, he runs Nobel Real Estate in Munich and a large number of companies in Luxembourg, even the Italian far right league would be involved, etc.
Among the names cited on Monday by Le Monde, which will publish the survey « OpenLux » in the form of a one – week series, are athletes such as Tiger Woods, artists such as Colombian singer Shakira, American actors Angelina Jolie and Brad Pitt, The Hermes family, the Crown Prince of Saudi Arabia and three-quarters of companies listed in CAC – 40, the main index of the Paris Stock Exchange.
« Hundreds of multinationals (LVMH, Kering, KFC, Amazon) have opened financial subsidiaries. Wealthy families use their real estate here, » Le Monde writes in his digital edition.
At the same time, the OpenLux investigation reveals the existence of funds of questionable origin, which could be linked to criminal activities in which Russian and Calabrian mafias are involved.
Even Italy’s far-right League would have an account in Luxembourg.
NJJ, the personal group of the founder of Free, owns Salt Mobile through a complex installation in Luxembourg.
Xavier Niel likes to give a picture of himself with fiscal patriotism. Free’s founder, an individual shareholder in the world, raised a few eyebrows by assuring in 2013 that « France is a » tax haven to « its » box.
Despite the acquisition of telecom operators from all over the world in recent years, Xavier Niel has made it a point of honor to remain a French resident and to keep in Paris the headquarters of his group NJJ (its private investment vehicle, distinct from Iliad, Free’s parent company). « This structuring reflects the desire for a national anchor in France, while others do the opposite with French activities and group holding companies in more « tax-countries » », he tells the world, according to Le Monde.
France is the most represented country: almost 15000 French own companies in Luxembourg, totaling at least €100 billion in assets, or 4% of French GDP. Among these citizens, « great bosses and their companies, doctors and art collectors, footballers and film producers, motorcycle consultants and pilots, writers and rich heirs, property owners and figures of the start-up nation ‘from SMEs’ and professional scammers, » lists Le Monde.
Belgian nationals are, after the French, the second most represented foreign nationality in the Luxembourg trade register. Not less than 10 066 Belgians have established one or more companies in Luxembourg; the French were 14,704 to have done the same, and the Luxembourgers were 14,531.
The Evening reports that 11,299 companies in the Luxembourg trade register include at least one active beneficiary of Belgian nationality. (17,376 French, 5,997 German, 4,933 Italian, among others).
While doctors, accountants, entrepreneurs, architects have chosen to relocate all or part of their activities to the Grand Duchy, Luxembourg’s appeal to investors is unsurprisingly proportional to the size of their wealth. This includes some of the most prominent sportsmen – including eleven of the Red Devil selected since 2015 – artists, billionaires, relatives of foreign politicians, people suspected of criminal activity, as well, Le Soir reports.
From the entrance of Russian giant Rosneft in 2014 to the present day, transfers of 6% of the Italian group have reconstructed thanks to OpenLux documents. A dancer at a dance school in Moscow, a director of a small business in Tatarstan, a wealthy private-sector entrepreneur, a former Kremlin official. They are the ones who, since 2014, have surpassed a significant part of Pirelli, which, according to official reports, was to belong to Rosneft, the Russian state oil giant. This is what appears based on the documents provided by OpenLux.
An international search by the Süddeutsche Zeitung, Le Monde and other media partners shows: Despite all the revelations and assurances, Luxembourg is still a tax haven. Every year, other countries lose billions of euros because the money is transferred to the Grand Duchy. The authorities welcome this and help large international companies reduce their tax burden through controversial tax structures.
Several MEPs criticized Luxembourg’s tax haven. The Süddeutsche Zeitung, Le Monde, the Miami Herald and other media partners previously reported in the so-called OpenLux search that the Grand Duchy continues to attract tax evaders from around the world. « Luxembourg is quietly exploiting an intra-European tax haven, and the European Commission seems largely inactive, » criticized the MEP, Markus Ferber, who is the economic spokesperson for the EPP Group. « In case of doubt, the Commission should not shirk the instrument of the infringement procedure. »
The Luxembourg government rejected the criticism. The Grand Duchy’s legislation is « in full compliance » with all European and international regulations and transparency standards. « The Grand Duchy was one of the first countries in Europe to set up a public register of actual beneficiaries. According to OpenLux’s research, about half are « All registered companies have information about the true owners of the company, and many mutual funds do not appear to declare their owners, even if they are required to do so.
Tax havens around the world are now competent to handle disclosures. Swiss Leaks, Football Leaks, Panama Papers, Paradise Papers, and now OpenLux – barely a year goes by without new research showing how bad financial policies in countries like Panama, the British Virgin Islands, and Malta are. The damage caused by tax evasion and tax minimization for other countries is estimated to be several hundred billion euros per year – not to mention that the non-transparent trade structures offered there can also serve criminals.
Are the people whose activities in Luxembourg have been revealed by OpenLux illegal? Difficult to answer clearly. First, opening a company in Luxembourg is completely legal. « You have to justify your economic activity and explain why you have domiciled it », confirms a Luxembourg lawyer to Le Monde. Group your activities in a holding company to manage them more easily too. Doing so in Luxembourg, rather than in France, allows for more advantageous taxation.
Thus, in Luxembourg, reselling an interest located in a holding is not taxed. In France, it’s 4%. Corporate profits are also taxed at 30% in France since the introduction of the flat tax in 2017, when they are exempt from any tax in Luxembourg. According to OpenLux data, at the end of 2019, more than €15 billion in profits never redistributed to shareholders were accumulated in Luxembourg companies owned by French. In France, this would be equivalent to bringing nearly €5 billion back into the state coffers.
But « tax secrecy requires, it is impossible to say whether all of these schemes, revealed by OpenLux, are actually known to the tax authorities, and whether some have been able to break the law, » Le Monde says. In addition, Luxembourg’s progress in transparency (the end of bank secrecy, the identification of the beneficial owners of companies, better international cooperation) has made fraud attempts more difficult. « In tax matters, the good times are a bit behind us. You have to make a reason, you pay taxes, » concludes a tax expert interviewed by the daily newspaper.
On Monday morning, Luxemburger Wort reported, Finance Minister Pierre Gramegna and Justice Minister Sam Tanson informed the Luxembourg parliament of the revelations – and weighed them. Gilles Baum, the leader of the ruling PD parliamentary group, even suspected some kind of conspiracy behind the revelations: « After Brexit, the cake will be redistributed and the banking centers will oppose. »
Tax havens around the world are now competent to deal with revelations. Swiss Leaks, Football Leaks, Panama Papers, Paradise Papers and now OpenLux – not a year goes by without new research showing how damaging the financial policies of countries like Panama, the British Virgin Islands or Malta are. The damage caused by tax evasion and tax minimization for other countries is estimated to be several hundred billion euros per year – not to mention that the non-transparent corporate structures offered there can also be used by criminals to launder profits illegally generated.
On Monday morning, Luxemburger Wort newspaper reported, Finance Minister Pierre Gramegna and Justice Minister Sam Tanson informed the Luxembourg parliament of the revelations – and weighed them down. Gilles Baum, the leader of the ruling PD parliamentary group, even suspected some kind of conspiracy behind the revelations: « After Brexit, the cake will be redistributed and the banks will be opposed to each other. »
Foreign tax experts have judged the results of OpenLux, research that shows how much the European Union should do more against tax minimization and tax evasion, explained the Independent Commission for the Reform of International Business Taxation (ICRICT) , of which Nobel laureate economist Joseph Stiglitz is a member. « The timid approaches don’t help, that’s why the topic of tax evasion.
The Luxembourg government – but also some of the opposition – rejects the criticism. The Grand Duchy is « one of the first countries in Europe to have set up a public register of beneficial owners », according to a website specially set up for the OpenLux revelations. A debate took place in Parliament on Tuesday afternoon.
It is true that the Member States of the European Union have agreed to introduce transparency registers. Luxembourg was one of the first countries to open the database to the public – however, it can only be searched for company names. OpenLux researchers have prepared the data so that it can also be searched for people.
The evaluation showed that in about half of all Luxembourg companies, the true owner is not appointed – instead, the directors general, the directors or no one appears. The Luxembourg government’s statement that the register is « 90% complete » is therefore misleading.
The shortcomings of the register in the field of investment funds, which manage assets of several trillion euros, are particularly visible. Many do not name their owners, although they are forced to do so, as an analysis by Transparency International and the Anti-Corruption Data Collective shows. Data experts from the two organizations found that, although several funds have revealed to the US authorities that they have between one and three owners and who they were, they are not mentioned in the Luxembourg register.
The Luxembourg Government reacted to the inquiry by stating that the country « fully complies with all European and international regulations on taxation and transparency, and applies all Community and international measures on the exchange of information to combat abuse and tax evasion ». The OECD and the European Union « have at present not identified any harmful tax practices in Luxembourg », he added in his press release. In Brussels, the European Commission indicated that it took note of this press investigation.
« These investigations are, of course, important information that drives change by exposing the flaws that may exist in the system. »
In France, some elected officials were moved by these revelations. « Disgusted by the fiscal indecency that still reigns in Europe, despite the scandals repeatedly! To be sure, it was transparency imposed by the EU that allowed the OpenLux revelations. But that’s not enough: « we need to regulate, » ecologist MEP Damien Carême said on Twitter.
Disgusted by the fiscal indecency that still reigns in Europe, despite the scandals repeatedly!
To be sure, it was #transparency imposed by the EU that allowed the #OpenLux revelations. But that’s not enough: we have to regulate. The European minimum rate is needed! https://t.co/J4TDGoX8Jj
— Damien CAREME (@DamienCAREME) February 8, 2021
« Six years after LuxLeaks, nothing has changed. And for good reason, the EU refuses to list Luxembourg as a tax haven, » Manon Aubry, an MEP for France, also denounced on Twitter.
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