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| Former PwC employees face trial over role in LuxLeaks scandal | Former PwC employees face trial over role in LuxLeaks scandal |
| (4 months later) | |
| Two former employees of PricewaterhouseCoopers accused of being behind the biggest ever leak of confidential corporate tax deals face criminal trial in Luxembourg on Tuesday. | Two former employees of PricewaterhouseCoopers accused of being behind the biggest ever leak of confidential corporate tax deals face criminal trial in Luxembourg on Tuesday. |
| Antoine Deltour and a second man, who is expected to be named in court this week, are charged with carrying out the LuxLeaks theft, violating the Grand Duchy’s strict professional secrecy laws and other offences. Their criminal prosecution follows a complaint to Luxembourg’s public prosecutor by PwC. | Antoine Deltour and a second man, who is expected to be named in court this week, are charged with carrying out the LuxLeaks theft, violating the Grand Duchy’s strict professional secrecy laws and other offences. Their criminal prosecution follows a complaint to Luxembourg’s public prosecutor by PwC. |
| The LuxLeaks scandal, which transformed the debate on international tax reform, exposed how Luxembourg had for years been secretly sanctioning, on an industrial scale, aggressive cross-border tax avoidance by some of the world’s largest businesses. | The LuxLeaks scandal, which transformed the debate on international tax reform, exposed how Luxembourg had for years been secretly sanctioning, on an industrial scale, aggressive cross-border tax avoidance by some of the world’s largest businesses. |
| Last month, Deltour told his supporters that together they were helping “the fight against unfair tax practices”. However, he added, “those who revealed these practices face jail and a fine that exceeds a lifelong income”. | Last month, Deltour told his supporters that together they were helping “the fight against unfair tax practices”. However, he added, “those who revealed these practices face jail and a fine that exceeds a lifelong income”. |
| Transparency International said: “Deltour should be protected and commended, not prosecuted. The information he disclosed was in the public interest.” | Transparency International said: “Deltour should be protected and commended, not prosecuted. The information he disclosed was in the public interest.” |
| More than 118,000 people have signed a petition in support of the 30-year-old former PwC whistleblower. Last year, the European parliament awarded him the Citizens’ Prize for his contribution to the promotion of common values. | More than 118,000 people have signed a petition in support of the 30-year-old former PwC whistleblower. Last year, the European parliament awarded him the Citizens’ Prize for his contribution to the promotion of common values. |
| Among the companies to see details of their complex international tax structures exposed were Pepsi, Ikea, Accenture, Burberry, Procter & Gamble, Heinz, JP Morgan, FedEx, Shire Pharmaceuticals and Icap. | Among the companies to see details of their complex international tax structures exposed were Pepsi, Ikea, Accenture, Burberry, Procter & Gamble, Heinz, JP Morgan, FedEx, Shire Pharmaceuticals and Icap. |
| In many instances, Luxembourg was shown to have approved complex, aggressive and artificial tax avoidance structures that drained the tax coffers of other countries. | In many instances, Luxembourg was shown to have approved complex, aggressive and artificial tax avoidance structures that drained the tax coffers of other countries. |
| Almost 28,000 tax rulings, returns and other sensitive documents from PwC were leaked to the media. The documents disclosed that the Luxembourg authorities had helped 340 big firms to minimise their tax payments, in some cases to 1% or less. | Almost 28,000 tax rulings, returns and other sensitive documents from PwC were leaked to the media. The documents disclosed that the Luxembourg authorities had helped 340 big firms to minimise their tax payments, in some cases to 1% or less. |
| Also on trial in Luxembourg will be a French investigative documentary-maker, Edouard Perrin, who was the first journalist to publish reports based on the leaked PwC papers. He is charged with complicity in the violation of professional secrecy laws, as well as possession and dissemination of confidential papers. | Also on trial in Luxembourg will be a French investigative documentary-maker, Edouard Perrin, who was the first journalist to publish reports based on the leaked PwC papers. He is charged with complicity in the violation of professional secrecy laws, as well as possession and dissemination of confidential papers. |
| The European Federation of Journalists has said: “It is shameful that the Luxembourg authorities are going after a journalist who has acted entirely in the public interest to publish the information. The authorities must drop the charges against Perrin immediately.” | The European Federation of Journalists has said: “It is shameful that the Luxembourg authorities are going after a journalist who has acted entirely in the public interest to publish the information. The authorities must drop the charges against Perrin immediately.” |
| In 2014, the Guardian and media in more than 20 countries published investigations based on the LuxLeaks papers in a collaboration organised by the International Consortium of Investigative Journalists. | In 2014, the Guardian and media in more than 20 countries published investigations based on the LuxLeaks papers in a collaboration organised by the International Consortium of Investigative Journalists. |
| This reporting led to condemnation of Luxembourg’s tax practices from politicians around the world, who also demanded urgent, radical reforms to the international rules for big businesses. | This reporting led to condemnation of Luxembourg’s tax practices from politicians around the world, who also demanded urgent, radical reforms to the international rules for big businesses. |
| In the European parliament, the European commission president, Jean-Claude Juncker, was forced to defend himself before a vote of confidence in his leadership. He had previously served as Luxembourg’s prime minister and had done much to shape its tax policy. “I am not the architect of what you call the Luxembourgish problem,” he said. | In the European parliament, the European commission president, Jean-Claude Juncker, was forced to defend himself before a vote of confidence in his leadership. He had previously served as Luxembourg’s prime minister and had done much to shape its tax policy. “I am not the architect of what you call the Luxembourgish problem,” he said. |
| Responding to the scandal, finance ministers of Germany, France and Italy wrote to the European commission complaining about the “uncooperative behaviour between member states”. | Responding to the scandal, finance ministers of Germany, France and Italy wrote to the European commission complaining about the “uncooperative behaviour between member states”. |
| Wolfgang Schäuble, Michel Sapin and Pier Carlo Padoan said it was an “obvious … turning point”, noting that the LuxLeaks revelations meant “the limits of permissible tax competition between member states had shifted”. They added: “This development is irreversible.” | Wolfgang Schäuble, Michel Sapin and Pier Carlo Padoan said it was an “obvious … turning point”, noting that the LuxLeaks revelations meant “the limits of permissible tax competition between member states had shifted”. They added: “This development is irreversible.” |
| In Luxembourg, however, the finance minster, Pierre Gramegna, condemned the leak of the PwC papers as “the worst attack Luxembourg has experienced in its history”. | In Luxembourg, however, the finance minster, Pierre Gramegna, condemned the leak of the PwC papers as “the worst attack Luxembourg has experienced in its history”. |
| Not everyone agreed. Within weeks of the LuxLeaks scandal breaking, further revelations were published based on another cache of leaked Luxembourg tax rulings – this time secured by Ernst & Young, Deloitte, KPMG and other firms. These exposed tax structures used by Disney, Skype, Koch Industries, Reckitt Benckiser and others. No one on trial this week has been linked to these leaked papers. | Not everyone agreed. Within weeks of the LuxLeaks scandal breaking, further revelations were published based on another cache of leaked Luxembourg tax rulings – this time secured by Ernst & Young, Deloitte, KPMG and other firms. These exposed tax structures used by Disney, Skype, Koch Industries, Reckitt Benckiser and others. No one on trial this week has been linked to these leaked papers. |
| Whistleblowing campaigners argue the LuxLeaks scandal exposes weaknesses in protections available for those who leak information. Transparency International said: “Luxembourg is one of few European countries with a dedicated law on whistleblowing, but it is too narrow. Deltour is not considered a whistleblower because the law in Luxembourg is limited to corruption offences and the information he revealed did not show blatant corruption. | Whistleblowing campaigners argue the LuxLeaks scandal exposes weaknesses in protections available for those who leak information. Transparency International said: “Luxembourg is one of few European countries with a dedicated law on whistleblowing, but it is too narrow. Deltour is not considered a whistleblower because the law in Luxembourg is limited to corruption offences and the information he revealed did not show blatant corruption. |
| “In addition, the law only protects whistleblowers against dismissal, not against prosecution. An amendment to the law is urgently needed.” | “In addition, the law only protects whistleblowers against dismissal, not against prosecution. An amendment to the law is urgently needed.” |
| Earlier this month, the European parliament approved new rules to protect corporate trade secrets which, according to campaigners, risk deterring future whistleblowing. | Earlier this month, the European parliament approved new rules to protect corporate trade secrets which, according to campaigners, risk deterring future whistleblowing. |