Is money laundering a truly international crime ?

Abstract

The rise of European directives tackling money laundering and tax evasion has led to a new regulatory framework and coordination across countries. The recent scandals proved an urging need for law enforcement which is still an ongoing process as the last AML directive (5th) was amended in July last year, along with the anti-avoidance directive.

The central message of this thesis is that while our European authorities are responding to money launderers and tax evaders with the elaboration of a legal framework, States are not taking the issue seriously enough. These matters have received a growing attention sadly due to the numerous scandals we face every year. The European Commission tries to convict European countries for granting multinationals illegal state aids but national government always counter-attack and appeal the decision (Starbucks, Fiat, Amazon, etc). Unfair taxation across EU-members should be easier to tackle with our European governing bodies but it must be recognized that the actual regulation does not provide enough tools to convict tax avoiders and/or to prove that an illegal state aid scheme is in place.

Through developing regulations, this paper tries to understand the challenge of tackling money laundering and particularly tax evasion across Europe and its restrictive structure. Data retrieved from the OECD, Eurostat, the IMF or the World Bank are being analysed to determine the link between tax incentives and foreign direct investments that is usually taken as a proxy to economic growth. Focusing on the Benelux, the main concern is to determine why those jurisdictions still allow tax avoidance and what are the benefits of doing so. Does a tax haven generate economic growth in the domestic market? Are these activities beneficial for the whole population?