European News – Country by country reporting: a preview
On 27 March 2017, the international NGO OXFAM published a report Opening the Vaults, which provided an analysis of financial information of the top 20 European banks on a country by country (CbCR) basis.
Focusing on tax jurisdictions where banks disclosed a high level of profits despite a small local presence or level of turnover, the report attracted broad and quite negative media coverage for the banks. For risk managers, this event is a concrete illustration of the damaging potential of country by country reporting for the reputation of their organisation.
This report was possible since a set of transparency rules, adopted in 2013, required European banks to report information on tax and profits for every country they operate.
A similar proposal from the European Commission that would extend CbCR to every organisation with a turnover of more than €750 million in any sector of the economy is now currently under discussion at the European Parliament.