I'm certainly hoping that this motion can have support from all four corners of this table.
Mr. Chair, the reality is that when we look at this issue of drug trafficking and money laundering.... I'm going to cite, as we've had cited around this table, the issue around tax havens that was in the Cornell University Press publication on tax havens. It stipulates that some 75% of all sophisticated drug trafficking operations use offshore secrecy havens. As well, of the criminal cases identified in IRS investigations--I'm particularly targeting Mr. Holder on this, because I know he will be interested in this reiteration of the argument--45% involved illegal transactions derived from legal income, and in the other 55%, illegal income was involved. In this case, 161 of the cases dealt with drug traffic. Of these, 29% involved the Cayman Islands. An equal amount involved Panama, and then other offshore tax havens. The four offshore tax havens alone accounted for 85% of the cases involving transactions of illegal income.
We've heard from witnesses who have said very clearly that adopting this implemented legislation without an accompanying tax information exchange agreement would be a boon to money laundering and drug trafficking. That's been very clear from the witnesses we've heard.
We've also heard from Panamanian government representatives that they have no intention, because it's not in their economic interest to adopt a tax information exchange agreement. Now, this is despite the fact that the government did request it and has had pending now for many months a letter asking for exactly that kind of information.
A double taxation agreement only tracks legal income. What we need is a tax information exchange agreement that would track the illegal income. That is what the Government of Canada's position has been. The Panamanian government is refusing to implement that.
I think it would be responsible on our part to say that we are not intending to move ahead with implementation of this agreement until such time as the Panamanian government steps forward and signs a tax information exchange agreement.
In the U.S. we've seen that type of agreement signed. There are loopholes, and there is a long process for implementation of that with the U.S. But the fact is that the U.S. Congress has not ratified the deal, and the fact that the U.S. Congress did not ratify the deal has pressed the Panamanian government to action.
I think it's very clear from the witnesses we've heard and the fact that the Panamanian government is refusing to sign this agreement, refusing to implement it, that as a committee we have a responsibility to say, no, we're going to suspend our deliberations on it, and we'll do clause-by-clause some other time. We'll bring it back to Parliament at a time when the Panamanian government responds to the Government of Canada's request for a tax information exchange agreement and puts into place the mechanisms that start to stop the tax evasion and money laundering that is endemic in that jurisdiction, according to the sources that we have cited here and from what our witnesses have said.
That's why I'm bringing forward the motion. I hope all members will support it. If that is the case, I think there will be enormous leverage to get the Panamanian government to act.