Stiglitz resigned in August from the inquiry panel set up by the Panamanian government after the leak of the Panama papers, in response to the authorities’ refusal to guarantee publication of his final report.

He described tax secrecy as the ‘darker side of globalisation’, and told MEPs the hiding of money undermined the functioning of global society. ‘So there has to be, basically, a comprehensive global approach with essentially zero tolerance for secrecy,’ Stiglitz said.

The Columbia University professor expressed reservations about the US’s future commitment to fighting tax secrecy, expressing concern over the tax arrangements used by Donald Trump, who is set to enter the White House in January.

Stiglitz said: ‘When your president is avoider-in-chief, it’s hard to have confidence in where we are going to go.’

He described as ‘absolutely critical’ the creation of publicly searchable registries of  beneficial ownership,  saying that the media as well as law enforcement agencies should be able to find out who is doing what activities.

Stiglitz said he was also in favour of stronger sanctions against the ‘enablers’ of tax avoidance, evasion and money laundering, including accountants, law firms, advisors and wealth managers. 

Countries that refuse to comply with ‘transparency norms’ should be cut off, he suggested, including prohibiting non-compliant companies from doing business with firms from compliant countries.

He said the EU could adopt an approach such as ‘you have a contagious disease and we won’t allow our corporations to interact with you.’

Stiglitz added that the EU could also consider adding transparency provisions in international trade agreements requiring trade partners to meet minimum transparency requirements such as a register of beneficial ownership or minimum corporate tax rates.

‘Put a floor on tax competition through minimum tax rates (...) and get rid of the extremes of tax competition that we see today,’ he said.

Separately, the British Virgin Islands (BVI) financial services commission has imposed a $400,000 (£320,600) fine on Mossack Fonseca, its largest ever, for contravening ‘numerous sections of the anti-money laundering and terrorist financing code of practice and BVI regulatory code.’

The fine cites failures in record keeping, risk assessment, and adequate updating of customer due diligence.

Orlando Smith, BVI premier and minister of finance said: ‘Today’s enforcement action clearly demonstrates the effectiveness of the territory’s independent regulator, the seriousness with which it tackles any breaches of its code and, through the adjustments made to its risk assessment framework, an on-going commitment to strengthening its regime to ensure this remains fit for purpose.

‘Throughout this time, the FSC has co-operated fully with any requests from other international law enforcement agencies who are conducting their own independent investigations and it will continue to do so as this befits its position as regulator of a leading finance centre.'

Smith said the adjustments to BVI’s risk assessment framework were aimed at more consistently detecting potential concerns to reduce the risk of non-compliance whilst also devoting additional resources to assessing the full compliance of all BVI licenced corporate service providers.

‘The BVI remains an engaged participant in the international community and is fully involved in initiatives aimed at creating a global tax and regulatory framework that can be implemented consistently to create a level playing field upon which all countries can fairly compete,’ he said.