LuxLeaks trial: UN human rights expert deplores conviction of tax whistleblowers

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United Nations human rights expert Alfred de Zayas today deplored the conviction of two whistleblowers in the so-called LuxLeaks scandal, who revealed how tax avoidance and tax evasion occurred in Luxembourg banks.

“Whistleblowers are heroes of our time and serve society and human rights,” he said.

“We seem to live in an upside-down world in which whistleblowers are convicted and those who loot society are not,” the UN Independent Expert on the promotion of a democratic and equitable international order stressed.

“Governments are systematically being deprived of essential tax revenues,” Mr. de Zayas warned. “As long as there are widespread tax avoidance, tax evasion and tax havens, States will not have the financial capacity to meet their human rights treaty obligations.”

On Thursday 29 June, two former PricewaterhouseCoopers employees received 12 and nine-month suspended sentences respectively for leaking documents revealing how Luxembourg granted lucrative tax breaks that saved firms including Apple, Ikea and Pepsi billions of dollars in taxes. The journalist who reported on the leaks was acquitted.

“Parliaments should adopt robust legislation not only to protect whistleblowers but also to reward them for contributing to ethics and integrity, especially in a sector where professional secrecy is at a peak” the expert said highlighting how the LuxLeaks trial decision may discourage individuals from reporting abuses.

“Secrecy is an enemy of democracy and the rule of law, since it facilitates not only tax evasion but also money-laundering and corruption. There is an urgent need for change,” Mr. de Zayas underscored. “Tax havens and other schemes used by individuals and mega-corporations to hide profits should be outlawed.”

The human rights experts added that “time is ripe for companies to bring tax into their human rights due diligence. Illicit financial flows, including through tax evasion, should be prosecuted.”

In his upcoming report to the UN General Assembly to be presented in October 2016 the Independent Expert will address the adverse human rights impact of tax havens and tax evasion.