Greece Eases Offshore Rules for Politicians’ Relatives, Sparking Transparency Concerns

14:06 15/5/2025 - Πηγή: Dikaiologitika

A recent amendment to Greece’s asset declaration law has triggered a political storm, with opposition parties accusing the government of weakening crucial safeguards against corruption and conflicts of interest.

The controversy centers on new provisions that allow close relatives of politically exposed persons (PEPs) to hold interests in foreign companies, including those with offshore characteristics, under less stringent conditions than before.

Previously, Greek law imposed a blanket ban on spouses, first-degree relatives, and proxies of PEPs from holding shares in any foreign company. The government now argues that this sweeping restriction infringed on individual economic freedoms and needed to be modernized. Under the new rules, the prohibition applies only to entities based in non-cooperative jurisdictions or countries with preferential tax regimes, such as well-known tax havens.

While officials claim the reform brings proportionality and aligns with international norms, legal and transparency experts are raising red flags. They warn that the amendment could serve as a legal “loophole,” allowing politicians to obscure financial interests through relatives and complex ownership structures.

Critics point to scenarios that highlight how the new framework could be exploited. For example, a relative of a politician could invest in a holding company registered in a high-transparency jurisdiction such as Luxembourg. While that company may appear clean, it could own subsidiaries in Bermuda or the Cayman Islands—tax havens known for limited financial oversight. In such cases, the economic benefits of the offshore entity still flow back to the politically connected individual, but without triggering scrutiny under the revised law.

Another concern involves the use of intellectual property transfers for tax optimization. A relative might hold shares in a startup based in Ireland, a country not flagged under the new restrictions. If that startup shifts its intellectual property to a subsidiary in the Cayman Islands, it effectively reaps offshore benefits while remaining technically compliant with the law.

Perhaps most troubling are trusts and nominee shareholder arrangements. A former spouse of a government minister, for instance, could be the beneficiary of a trust registered in Guernsey, which then holds assets in multiple global investment firms. Such ownership is notoriously difficult to trace and is not explicitly addressed by the amendment—raising concerns about whether real oversight is even possible.

Experts stress that the law’s focus on a company’s legal or operational headquarters is no longer sufficient in an era of global finance. Multinational structures often use transparent jurisdictions as facades, while profits are funneled through subsidiaries in offshore tax havens. Moreover, the absence of a robust mechanism to verify the true beneficial owner leaves the system reliant on self-reporting—effectively allowing insiders to police themselves.

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