panama papers
An activist in Berlin clutching a suitcase stuffed with fake money demands greater transparency in new legislation following the ongoing Panama Papers affair, April 13, 2016. Getty Images/Sean Gallup

Just days after the European Union unveiled a new proposal aimed at clamping down on corporate tax avoidance by companies operating in the 28-nation bloc, five of EU’s largest economies announced they had agreed to share data on owners of offshore companies. The deal, announced by U.K. treasury chief George Osborne Thursday, would allow the U.K., France, Germany, Spain and Italy to exchange information on beneficial owners of companies.

“Today we deal another hammer blow ‎against those who hide their illegal tax evasion in the dark corners of the financial system,” Osborne said in a statement. “Britain will work with our major European partners ‎to find out who really owns the secretive shell companies and trusts that have been used as conduits for evading tax, laundering money and benefitting ‎from corruption.”

Under the new deal, the five nations will exchange information about real owners of not just companies, which is stored on beneficial ownership registers, but also financial trusts, for which a new register would be created.

“A global move towards interlinking country registries will provide, for the first time, international real-time access to tax and law enforcement agencies on company ownership,” the U.K. treasury said in a statement. “The European pilot will begin to explore the best way for countries to share this information, with a view to developing a truly global common standard in a two-step process leading to the interlinking of national registries.”

Since the trove of over 11 million confidential documents was leaked from the Panamanian law firm Mossack Fonseca earlier this month, several politicians have been caught in the ensuing maelstrom. The fallout forced Iceland Prime Minster Sigmundur Davíð Gunnlaugsson out of the office, and, most recently, cost Spain's acting industry minister, José Manuel Soria, his job.

In a letter to the G-20 nations, finance ministers from the five nations also urged their counterparts in the region to follow suit.

“As recent events have shown, we need to take firm collective action on increasing beneficial ownership transparency, building on our actions to date. Criminals continue to find ways to exploit the cracks in the current system; setting up complex structures in various and often multiple locations to hide their activities, be it money laundering, tax evasion or illicit finance,” the ministers wrote in the letter. “As with tax evasion, this requires a global response.”