Accountabliity and the EU, Ireland, and Apple, et al

Headline

The headline story concerns the EU determining that one of its member states entered into an agreement with a firm which resulted in a favorable tax opportunity for the firm.

Details

Interesting Details

For my purposes, there are some interesting details I've cherry-picked:

• the execution date of the agreement, 1991 and 2007
• the ruling entity, EU Commisison
• the "guilty" parties: Ireland and Apple
• the EU-requested flow of cash:  Apple to pay Ireland $13B Euro

The Reduction

After my admitted cherry-picking, here's what the story boils down to: After a three-year investigation, the EU doesn't like a twenty-five year old agreement. 

Its ruling acts only to punish a business for an action committed by a member of the EU -- as I cannot consider being told to collect $13B Euro a punishment, by any reach of the imagination.

That's right: A country executes an illegal incentive agreement and as punishment is required to collect (benefit financially) from the other party to the agreement.

Imagine that, twenty-five years ago, your child trades his set of Rookie Cards for a bag of Haribo Gummy Bears. At the time, you either didn't notice or didn't care to notice. Three years ago, you start looking around the house - now that you're empty-nesters - and remember that box of Rookie Cards. After asking around for a couple of years, the story comes to the surface. You decide it wasn't fair (had you known, you never would have permitted the trade) and demand the situation be rectified. You're not upset with your kid, though you give him a stern lecture on the value of things. You're upset with the neighborhood kid who had an extra bag of Gummy Bears. Congratulations, you're a helicopter parent.

The EU Commission is similar to that helicopter parent; you know, the one externally committed to  ensuring everyone plays by the rules, while steadfastly refusing to hold their own children accountable for their actions. 

Accountability

If the EU has a problem with Ireland's tax incentives, then the EU has a problem with Ireland. Want to rectify this? Hold Ireland accountable for $13B Euro it should have collected, but didn't. 

Holding firms accountable for twenty-five years of sweetheart deals offered by member countries does not provide any incentive to EU countries to play by the rules.  In fact, it appears EU countries who now understand how this game is played can offer all of the incentives they want, then give a wink and a nod to the EU Commission when they want to collect.

Caveats

Admittedly, I have over-simplified (but not mis-represented) the treatment of this issue to stay at a relatively high-level. I'm much more interested in the forest, than the individual trees. There are likely some dense pockets in this forest which are home to integrity, accountability, fairness, and honesty. There are, no doubt, a lot of good people involved in this investigation and ruling -- people who hold their professional behavior in high regard. I'm not discounting any of their work.

However, I am concerned about an institution whose only avenue for correcting its transgresses does not in fact address the transgressor.

Disclaimers and Full Disclosure

1. I'm not a lawyer. You're welcome.
2. I'm not an International Business Expert.
3. We own a position in Apple, but not enough to get me on the Board of Directors.