The committee is to investigate alleged contraventions and maladministration in the application by the European Commission or member states of EU laws on money laundering, tax avoidance and tax evasion.

The committee will be made up of 65 MEPs, who will report back to the parliament by June 2017.

Essentially, the committee will examine how and why the use of offshore tax havens has been so prevalent, supported by tax advisers, intermediaries and lawyers working across the EU 28 members states. It has set out a raft of directives which it claims have been contravened in the use of shell companies in Panama set up through Mossack Fonseca.

The scope of the inquiry highlights the weaknesses in compliance with the current EU tax rulings.

In April, the International Consortium for Investigative Journalism (ICIJ) broke the Panama Papers story, revealing that it had access to a database of 11.5m documents from Mossack Fonseca, a global law firm based in Panama.

The EU statement of objectives for the inquiry said: ‘ Although thorough analysis of the documents is still needed, these records apparently show that Mossack Fonseca created more than 214,000 offshore entities in 21 jurisdictions considered as tax havens connected to people in more than 200 countries and territories.’

investigate alleged failure of the Commission to enforce and of Member States to implement and to enforce effectively Directive 2005/60/EC, taking into account the obligation of timely and effective implementation of Directive (EU) 2015/849; -

 investigate alleged failure of Member States authorities to apply administrative penalties and other administrative measures to institutions found liable of serious breach of the national provisions adopted pursuant to Directive 2005/60/EC, as required by the Directive 2013/36/EU;

The committee will report back within 12 months by June 2017.

Details of the EU directives under investigation as part of the Panama Papers inquiry are here