Background
From an internal leaked memorandum
Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.
Partner of Mossack Fonseca[6]
- Primarily provides services to people or businesses who are not its residents.
- Requires little or no disclosure of information before doing business.
- Offers low taxes.[7]
Law firms generally play a central role in offshore financial operations.[10] Mossack Fonseca, the Panamanian law firm whose work product was leaked in the Panama papers affair, is one of the biggest in the business.[6] Its services to its clients include incorporating and operating shell companies in friendly jurisdictions on their behalf.[12] They can include creating "complex shell company structures" that, while legal, also allow the firm's clients "to operate behind an often impenetrable wall of secrecy".[8] The leaked papers detail some of their intricate, multi-level and multi-national corporate structures.[13]
Mossack Fonseca has acted on behalf of more than 300,000 companies, most of them registered in financial centers which are British Overseas Territories.[12] The firm works with the world's biggest financial institutions, including Deutsche Bank, HSBC, Société Générale, Credit Suisse, UBS, Commerzbank and Nordea.[14][15]
The Tax Justice Network called Panama one of the oldest and best-known tax havens in the Americas, and "the recipient of drugs money from Latin America, plus ample other sources of dirty money from the US and elsewhere", according to The Conversation.[16] Panama has been repeatedly listed in the recent years as a jurisdiction does not cooperate with international tax transparency initiatives.[17][18][clarification needed][16][19][20]
International Monetary Fund (IMF) researchers estimated in July 2015 that profit shifting by multinational companies costs developing countries around $213 billion a year, almost 2% of their national income.[21]
Leak timeline and logistics
A conversation between Süddeutsche Zeitung and the anonymous source
At his insistence, reporters communicated with the source over encrypted channels only. Anonymity and an understanding that they would never meet face-to-face were his conditions for providing the documents. He said his life was in danger but declined remuneration.[25][26] "There are a couple of conditions," he said. "My life is in danger, we will only chat over encrypted [lines]. No meeting ever."
According to Süddeutsche Zeitung reporter Bastian Obermayer, the source said that he decided to leak the data because he thought that Mossack Fonseca acted unethically. "The source thinks that this law firm in Panama is doing real harm to the world, and the source wants to end that. That's one of the motivations," said Obermayer.[26]
The International Consortium of Investigative Journalists (ICIJ) helped organize the research and document review once Süddeutsche Zeitung realized the scale of the footwork required to validate the authenticity of leak. Additional stories based on this data are in the works, and the full list of companies is to be released in early May 2016. They enlisted reporters and resources from The Guardian, the BBC, Le Monde, SonntagsZeitung, Falter, La Nación and German broadcasters NDR and WDR, and Austrian broadcaster ORF, and eventually many others.
The sheer quantity of leaked data greatly exceeds the Wikileaks Cablegate leak in 2010[23] (1.7 GB),[27] Offshore Leaks in 2013 (260 GB), the 2014 Lux Leaks (4 GB), and the 3.3 GB Swiss Leaks of 2015. In comparison, the 2.6 TB of the Panama Papers equals 2,600 GB.
About 400 journalists from 107 media organizations in 80 countries at some point received and analyzed leak documents detailing the operations of the law firm and its clients' shell companies[6] After more than a year of reporting, the first news stories based on the documents were published on 3 April 2016, along with 149 of the documents themselves.[28] The data concerned the operations and workings of some 214,000 shell companies. Reporters sorted the documents into a huge file structure containing a folder for each shell company, which held the emails, contracts, transcripts, and scanned documents Mossack Fonseca had generated while doing business with the company or administering it on a client's behalf.[23] Some 4.8 million leaked files were emails, 3 million were database format files[clarification needed], 2.2 million PDFs, 1.2 million images, 320,000 text files, and 2242 files in other formats.[23][29]
Journalists indexed the documents, using open software packages Apache Solr and Apache Tika,[30] and accessed them by means of a custom interface built on top of Blacklight.[30] Süddeutsche Zeitung reporters also used Nuix for this, proprietary software donated by an Australian company also named Nuix.[2]
Using Nuix, SZ reporters also performed optical character recognition (OCR) processing on the millions of scanned documents, and the data they contained became both searchable and machine-readable. Most reporters then used Neo4J and Linkurious[30] to extract individual and corporate names from the documents for analysis, but a few used Nuix for this as well.[2] They then cross-matched the compiled lists of people against the processed documents.[23] In the next step the reporters analyzed their information, trying to connect people, roles, monetary flow and structure legality.[23]
Data security
Mossack Fonseca notified its clients on 1 April 2016 that it had sustained an email hack. When the document leak became public, the firm dismissed any connection to the email hack and described it[clarification needed] as limited in scope. ICIJ had already had the leaked data for more a year by then, so possibly[improper synthesis?] the two were indeed entirely separate events. Data security experts noted, however, that the company had not been encrypting its emails[31] and furthermore seemed to have been running a three-year-old version of Drupal with several known vulnerabilities.[31]Clients of Mossack Fonseca
Main article: List of people named in the Panama Papers
Reports from April 3 noted financial and power connections to multiple high-ranking political figures and their relatives.[6][32][33]
United Arab Emirates President Khalifa bin Zayed Al Nahyan
The leaked files identified 61 family members and associates of prime ministers, presidents and kings,[35] including the deceased father of British prime minister David Cameron, the brother-in-law of China's paramount leader Xi Jinping,[32] the son of Malaysian prime minister Najib Razak,[32] the children of Pakistani prime minister Nawaz Sharif,[32] and Azerbaijani president Ilham Aliyev,[32] the nephew of South African president Jacob Zuma,[36] the grandson of Kazakh president Nursultan Nazarbayev,[32] the personal secretary of Moroccan king Mohammed VI,[32] and the "favourite contractor" of Mexican president Enrique Peña Nieto.[32]
Other clients included less-senior government officials and their close relatives and associates from over forty different countries.[32][undue weight? ]
Many individuals mentioned in the Panama Papers were connected with the world governing body of association football, FIFA, including former president of CONMEBOL Eugenio Figueredo,[37] former President of UEFA Michel Platini,[38] former secretary general of FIFA Jérôme Valcke,[38] Argentine player Lionel Messi, and from Italy, the head manager of "Metro" Antonio Guglielmi.[37]
Passports of at least 200 Americans were discovered in the Papers, but no US politicians have been named in the leak.[32][40][41]
Mossack Fonseca ran six businesses for Rami Makhlouf, cousin of Syrian president Bashar al-Assad, despite US sanctions against him.[42] DCB Finance, a Virgin Islands-based shell company founded by North Korean banker[43] Kim Chol Sam and British banker Nigel Cowie[44] also ignored international sanctions and continued to do business with North Korea with the help of the Panamanian firm. The US Department of the Treasury in 2013 called DCB Finance a front company for Daedong Credit Bank and announced sanctions against both companies for providing banking services to Korean arms dealer Korea Mining and Development Trading Corporation,[43] attempting to evade sanctions against that country, and helping to sell arms and expand North Korea's nuclear weapons programme. Cowie said the holding company was used for legitimate business and he was not aware of illicit transactions.[44]
According to TeleSUR, United Arab Emirates President Khalifa bin Zayed Al Nahyan "used the services of Mossack Fonseca to establish at least 30 companies in the British Virgin Islands that owned and operated US$1.7 billion worth of commercial and residential assets for the Sheikh in high-end neighborhoods in the United Kingdom."[45] Prime Minister of Pakistan Nawaz Sharif's three children — Mariam Safdar, Hasan and Hussain Nawaz Sharif are among the over 200 members of the Pakistani elite listed in the Panama Papers as owners of offshore companies in a tax haven.[46]
Popular Indian celebrities such as Amitabh Bachchan and Aishwarya Rai Bachchan are also involved, along with the real estate developer, DLF owner Kushal Pal Singh, and Sameer Gehlaut of the Indiabulls group, as well as Gautam Adani's elder brother Vinod Adani.[47][48] Indian politicians on the list include Shishir Bajoria from West Bengal and Anurag Kejriwal, the former chief of the Delhi unit of Loksatta Party.[47]
Actor Jackie Chan has been mentioned in the leaks as a shareholder of six companies based in the British Virgin Islands.[49]
Among the celebrities involved in this list, the Spanish director Pedro Almodovar, who (along with his brother Augustine) created a company called Glen Valley in the British Virgin Islands, which are a tax haven. Mexican actress Edith Gonzalez was related through her husband Lorenzo Lazo, who was a Televisa partner, Veracruz governor and currently owns an airline online. Similarly, it is ensuring that the president of TV Azteca, Banco Azteca and Azteca Foundation, Benjamin Ricardo Salinas Pliego, used an offshore company set up in the Virgin Islands with Panamanian firm for the purchase of a yacht. Puerto Rican recording artist Daddy Yankee appeared inside the huge leak of information from the Panama Papers.[citation needed]
Icelandic prime minister
Sigmundur Davíð Gunnlaugsson, Prime Minister of Iceland until April 5, 2016.
Contacted by ICIJ journalists ahead of publication, the couple issued statements about journalist encroachment on their private lives and insisted on their disclosures were complete and the company paid taxes in Iceland. However, since his position involved negotiating with bank creditors and his wife as a bondholder was among them, citizens felt he had a strong conflict of interest. Calls for a snap election in the Althing (the Icelandic Parliament) were expected,[53] but following the papers' release, faced calls for his resignation instead. Between 22,000 and 24,000 people attended an anti-government protest outside parliament on April 4, 2016, and Edward Snowden wondered in a tweet if this constituted the "largest protest by percentage of population in history".[54][55][56]
On April 4, 2016, Davíð announced on live television that he would not resign in the wake of the Panama Papers revelations, calling their content "nothing new".[57] He said he had not broken any rules and that his wife did not benefit financially from his decisions.[51] However, on April 5, he asked the President of Iceland to dissolve Parliament and call for a general election. The president refused, saying it was not clear that other parties supported the move.[58] Sigmundur Davíð announced his resignation April 5, though later press statements from his office suggested that he merely "stepped aside" for a time.[59][60]
Juan Armando Hinojosa
In 2015 Juan Armando Hinojosa Cantú, a close friend of Mexican president Enrique Peña Nieto, enlisted Mossack Fonseca to create trusts for accounts worth $100 million after he was investigated for allegedly giving special favours to the Mexican president and his wife, according to an analysis by ICIJ, who said that the documents showed "a complex offshore network" of nine companies in New Zealand, the United Kingdom and the Netherlands.[61] Described as Peña Nieto's "favorite contractor", Hinojosa's companies have won more than eighty government contracts and received at least $2.8 billion in state money, The New York Times reported last year.[62]Beneficiaries of the Brink's-Mat robbery
Over £10 million of cash from the sale of the gold stolen in the 1983 Brink's-Mat robbery was laundered, first unwittingly by and later with the complicity of Mossack Fonseca, through a Panamanian company, Feberion Inc, set up on behalf of an unnamed client twelve months after the robbery. The money was put through Feberion, which had issued bearer shares only, and other front companies, via banks in Switzerland, Liechtenstein, Jersey, and the Isle of Man. Two nominee directors from Sark were appointed to Feberion by Jersey-based offshore specialist Centre Services.[63] The offshore firms served to recycle the funds through transactions in land and property in the United Kingdom.[63] Although the metropolitan police raided the offices of Centre Services in late 1986 in cooperation with the Jersey authorities where they seized papers and the two Feberion bearer shares, it wasn't until 1995 that Brink's-Mat's solicitors were finally able to take control of Feberion and the assets.[63]Mossack Fonseca companies
Mossack Fonseca has managed more than 300,000 companies over the years,[12] with the number of active companies peaking at over 80,000 in 2009. Over 210,000 companies in twenty-one jurisdictions figure in the leaks. More than half were incorporated in the British Virgin Islands; others in Panama, the Bahamas, the Seychelles, Niue, and Samoa. Mossack Fonseca's clients have come from more than 100 countries; most of the corporate clients were from Hong Kong, Switzerland, the United Kingdom, Luxembourg, Panama, and Cyprus. Mossack Fonseca worked with more than 14,000 banks, law firms, incorporators and others to set up companies, foundations, and trusts for their clients.[64] Some 3,100 companies listed in the database appear to have ties to US offshore specialists, and 3,500 shareholders of offshore companies list US addresses.[40] Mossack Fonseca has offices in Nevada and Wyoming.[65]The leaked documents indicate that about USD $2 trillion has passed through the firm's hands.[66] Several of the holding companies that appear in the documents did business with sanctioned entities, such as arms merchants and relatives of dictators, while the sanctions were in place. The firm provided services to a Seychelles company named Pangates International, which the US government believes supplied aviation fuel to the Syrian government during the current civil war, and continued to handle its paperwork and certify it as a company in good standing, despite sanctions, until August 2015.[42]
More than 500 banks registered nearly 15,600 shell companies with Mossack Fonseca, with HSBC and its affiliates accounting for more than 2,300 of the total. Dexia and J. Safra Sarasin of Luxembourg, Credit Suisse from the Channel Islands and the Swiss UBS each requested at least 500 offshore companies for their clients.[64] An HSBC spokesman said, "The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years."[67]
Luxembourg's Nordea bank requested almost 400 holding companies in Panama and the British Virgin Islands for their customers between 2004 and 2014.[68][69] The Swedish Financial Supervisory Authority (FI) has said that "serious deficiencies" exist in how Nordea monitors for money laundering, and has given the bank two warnings. In 2015 Nordea had to pay the largest possible fine – over 5 million EUR.[68] In 2012 Nordea asked Mossack Fonseca to change documents retroactively so that three Danish customers' power of attorney documents would appear to have been in force since 2010.[68] The director for Nordea Private banking, Thorben Sanders, has admitted that before 2009 Nordea did not screen for tax evaders: "In the end of 2009 we decided that our bank shall not be a means of tax evasion," said Sanders.[68] Other Swedish banks are also present in the documents, but Nordea occurs 10,902 times and the next most frequently mentioned bank only occurs 764 times.[70] In response to the leaks, Prime Minister Stefan Löfven said he is very critical of Nordea's conduct and role, while Minister of Finance Magdalena Andersson characterized the bank's conduct as "totally unacceptable".[15][71][72]
Mossack Fonseca response
In response to queries from the The Miami Herald and ICIJ, Mossack Fonseca issued a 2900-word statement. In substance, the response identified legal and compliance regimes around the world that reduce the ability of individuals to use offshore companies for tax avoidance and total anonymity. In particular, they cited the FATF protocols which (for companies and financial institutions in the majority of countries in the world) require identification of ultimate beneficial owners of all companies (including offshore companies) to open accounts and transact business.In an accompanying Editor's note, The Miami Herald stated that the Mossack Fonseca statement "did not address any of the specific due-diligence failings uncovered by reporters".[73]
On Monday, April 4, Mossack Fonseca released a statement: "Our industry is not particularly well understood by the public, and unfortunately this series of articles will only serve to deepen that confusion. The facts are these: while we may have been the victim of a data breach, nothing we've seen in this illegally obtained cache of documents suggests we've done anything illegal, and that's very much in keeping with the global reputation we've built over the past 40 years of doing business the right way, right here in Panama. Obviously, no one likes to have their property stolen, and we intend to do whatever we can to ensure the guilty parties are brought to justice. But in the meantime, our plan is to continue to serve our clients, stand behind our people, and support the local communities in which we have the privilege to work all over the world, just as we've done for nearly four decades." Firm co-founder Ramón Fonseca Mora told CNN that the information published is false and full of inaccuracies and that parties "in many of the circumstances" cited by the ICIJ "are not and have never been clients of Mossack Fonseca." The firm provided longer statements to ICIJ.[74] Fonseca also said that the company always have been legal and have been hacked.[75]
In its official statement[76] Mossack Fonseca suggested that responsibility for potential legal violations may lie with failures or lapses by other institutions given that:
approximately 90% of our clientele is comprised of professional clients, such as international financial institutions as well as trust companies and prominent law and accounting firms, who act as intermediaries and are regulated in the jurisdiction of their business. These clients are obliged to perform due diligence on their clients in accordance with the KYC and AML regulations to which they are subject.In an interview Jürgen Mossack and Ramón Fonseca gave to Bloomberg Mossack said: "The cat's out of the bag, so now we have to deal with the aftermath."[77]
Consequences
Gerard Ryle, director of the International Consortium of Investigative Journalists, called the leak "probably the biggest blow the offshore world has ever taken because of the extent of the documents."[51] Edward Snowden described the release in a Twitter message as the "biggest leak in the history of data journalism".[78]"This is a unique opportunity to test the effectiveness of leaktivism", said Micah White, co-founder of Occupy, "... the Panama Papers are being dissected via an unprecedented collaboration between hundreds of highly credible international journalists who have been working secretly for a year. This is the global professionalization of leaktivism. The days of WikiLeaks amateurism are over."[79]
Ramón Fonseca said the leak was not an "inside job" – the company had been hacked by servers based abroad. It had filed a complaint with the Panamanian attorney general's office.[80]
On April 7, 2016 is was announced that Jürgen Mossack was resigning from Panama's council on foreign relations (Conarex).[81][82] Yet, he was not officially serving at the time of his resignation.[83] His brother Peter Mossack still serves as honorary Consul of Panama from 2010 to date.[84][85][86][87]
Allegations, reactions and investigations
Main article: Reactions to the Panama Papers
Argentina
Argentine President Mauricio Macri
On April 7, 2016, federal prosecutor Federico Delgado began a formal investigation into Macri's involvement with Fleg Trading Ltd., the company registered in Panama for which President Macri was listed as director. Judge Sebastián Casanello was asked to start the file on the inquiry.[88] The initial petition was made by Neuquén representative Darío Martínez. Martínez claims Macri could be guilty of perjury due to omissions made in his sworn statement.[89] Martínez also referenced another offshore company, Kagemusha SA (named after Akira Kurosawa's 1980 film), which had been established in 1981 and to which President Macri also had connections.[90][91]
The family of Argentine football star Lionel Messi announced that they will file a complaint after reports accused him of assembling a tax evasion network in Panama. The family denied Messi had been involved and called the accusations slanderous. They said that the company referred to in the Panama Papers was inactive and that Messi had declared all income from image rights before and after proceedings with the Argentine Tax Agency.[92]
Australia
The Australian Taxation Office
has announced that it is investigating 800 individual Australian
taxpayers on the Mossack Fonseca list of clients and that some of the
cases may be referred to the country's Serious Financial Crime Task
Force.[93]
Azerbaijan
President of Azerbaijan Ilham Aliyev
According to ICIJ website, "The family of Azerbaijan President Ilham Aliyev leads a charmed, glamorous life, thanks in part to financial interests in almost every sector of the economy. ... [Aliyev's daughter] Arzu, has financial stakes in a firm that won rights to mine for gold in the western village of Chovdar and Azerfon, the country's largest mobile phone business. Arzu is also a significant shareholder in SW Holding, which controls nearly every operation related to Azerbaijan Airlines ("Azal"), from meals to airport taxis. Both sisters and brother Heydar own property in Dubai valued at roughly $75 million in 2010; Heydar is the legal owner of nine luxury mansions in Dubai purchased for some $44 million".[94]
Bangladesh
According to numerous media outlets, two conglomerates and thirty-two
Bangladeshi shareholders are listed. Top business personalities include
Muhammed Aziz Khan, Mohiuddin Monem, and Samson H. Chowdhury. Awami League Presidium member Kazi Zafarullah and his wife Nilufar Zafar are said to be in the list.[95]On April 7, 2016, The Anti Corruption Commission Bangladesh launched an inquiry to obtain details of the businesses and individuals and said that tax evaders would be brought to trial and punished.
Brazil
Politicians from seven parties in Brazil were named as clients of a
Panama-based firm at the center of a massive data leak over possible tax
evasion. The leaked files included politicians from Brazil's largest
party, the PMDB, which broke away from President Dilma Rousseff's coalition in 2016. Political figures from the PSDB, the most prominent opposition party in the country, was also mentioned in the leaks, as well as others from the PDT, PP, PSB, PSD and the PTB parties. No politicians from Rousseff's party were mentioned in the leaks.[96] A research in the Panama Papers, from a group of Dutch journalists from the daily newspaper Trouw, has shown that TV Globo is cited “many times” in a money laundering investigation of the De Nederlandsche Bank
which revealed that for years the media outlet conducted several
“irregular financial transactions” through tax havens in order to pay
broadcast rights for the Copa Libertadores.[97]
Canada
Canadian prime minister Justin Trudeau
has denied any involvement with the leak, saying "I have entirely and
completely been transparent about mine and my family’s finances. That is
something I learned early on that Canadians expect from their leaders."[98] The government has ordered the Canada Revenue Agency to find copies of the Panama Papers, in order to find any Canadians that used offshore accounts to avoid taxes.[98]The Royal Bank of Canada's CEO David McKay announced that the bank set up a team that will look back through four decades of documentation for ties to Mossack Fonseca.[99][100] CEO Bill Downe of the Bank of Montreal also defended, saying "Canadian banks have 'dramatically' beefed up anti-money laundering controls over the last seven to 10 years." He also stated that any link between Canadian businesses and the Panama Papers would have originated a long time ago, before the time when Canadian banks took action to stop money laundering.[99]
People's Republic of China
Considering the material to be a concerted foreign media attack on China, internet information offices were immediately given verbal orders to delete reprinted reports on the Panama Papers, and not to follow up on related content without exceptions. Hong Lei, the spokesman of China's foreign ministry, responded that he had "no comment" for "such groundless accusations" at an April 5 news conference.[103]
Chinese authorities have blocked almost all information about the Panama Papers on Chinese media and the Internet. A screenshot showed that the authority had forced all websites to delete content about the Panama Papers.[104] Foreign websites such as Wikileak, China Digital Times have been blocked in mainland China. On Sina Weibo, a twitter-like social media in China, almost all content about the Panama Papers was deleted. Because Xi's brother-in-law had been named, and the Panama Canal is well known, Weibo users started to use "brother-in-law", "Canal Papers", and other such tags to avoid Weibo's censor.[105] Despite the censorship in mainland China, Weibo search ranking was topped by phrases related to the Panama Paper since its press coverage such as "tax evasion", "document", "leak" and "Putin".[106]
Colombia
The National Directorate of Taxes and Customs launched an investigation into all 850 clients of Mossack Fonseca Colombia, a subsidiary of Mossack Fonseca that was established in 2009.[107] In 2014, Colombia had placed Panama onto its blacklist of tax havens.[108]
Cyprus
Central Bank of Cyprus
officially declared: "With regard to press reports citing leaked
documents, known as the Panama Papers, the Central Bank of Cyprus
announces that it is assessing the information to the extent that it may
concern the Cypriot banking system and taking, where necessary,
appropriate action."[109]
A Cypriot online paper said "The Cyprus link stems from the fact that
Fonseca runs an office in Cyprus and, more specifically, in Limassol.
In a chart, the leaks name Cyprus as a tax haven (countries that offer
little or no tax), although it has a corporate tax rate of 12.5%, the
same as Ireland."[109]
European Union
Many senior EU figures have been implicated in the Panama Papers scandal.[110] The European Commissioner for Taxation, Pierre Moscovici, has said that the European Union
as a whole had a "duty" to prevent the kind of tax avoidance uncovered
in the Panama Papers scandal. Moscovici told reporters the use of
offshore companies to hide what he called "shocking amounts" of
financial assets from tax authorities was "unethical". He estimated that
the tax shelters resulted in an annual loss of some €1 trillion in
public finances, adding that the European Commission attempted to tighten tax rules across the union since November 2014 due to the "LuxLeaks"
tax avoidance scandal (also revealed by the ICIJ), and hoped the extent
of the Panama Papers revelations would spur countries to action.[111]In a 2013 letter unearthed by the Financial Times to the then president of the European Council, Herman Van Rompuy, the Prime Minister of the United Kingdom David Cameron said that offshore trusts should not automatically be subject to the same transparency requirements as shell companies.[112][113] Some analysts suggest that these actions may have an impact on the outcome of the upcoming referendum on UK membership of the EU.[114]
Egypt
Alaa Mubarak, son of former president Hosni Mubarak, was cited as owning, through holding companies, real estate properties in London.[61]
France
French financial prosecutors opened a probe, and President François Hollande declared that tax evaders would be brought to trial and punished.[115] Also as a result, France restored Panama to its tax havens list, from which it had recently been removed.[116]Jean-Marie Le Pen, founder and long-time leader of the far-right-wing Front National is mentioned in the documents, along with several aides of his daughter Marine Le Pen, the current party leader.[61]
Iceland
On April 5, 2016, Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson announced his resignation.[59] Reykjavík City Council Member Júlíus Vífill Ingvarsson resigned earlier in the day.[117]Shortly after initial reports of Sigmundur Davíð's resignation, the Prime Minister's office in Iceland issued a statement to the international press saying that Sigmundur Davíð has not resigned, but rather stepped aside for an unspecified amount of time and will continue to serve as the Chairman of the Progressive Party.[60]
India
Indian prime minister Narendra Modi
ordered an inquiry, and subsequently the Indian government announced
that it was constituting a special multi-agency group comprising
officers from the investigative unit of the Central Board of Direct Taxes and its Foreign Tax and Tax Research Division, the Financial Intelligence Unit and the Reserve Bank of India.[118]
Indonesia
Finance Minister, Bambang P.S. Brodjonegoro, immediately responded
quickly to the leaked data of tax evasion "Panama Papers" by instructing
the directorate general of taxation (DGT) to follow up the findings.
Leaked investment data originating from Panama law firm, Mossack
Fonseca, attracted Bambang's attention because they can be a source of
new information about the potential tax that has not been traced."I've asked Mr Ken (Dwijugiasteadi), Director General of Taxation, please let's study the data known as Panama Papers", he said at the headquarters of the DGT, Tuesday (5/4).
The finance minister once said there is potential for the property of the taxpayer around Rp 4,000 trillion, which has not been affected by the tax. He specifies, around Rp 1,400 trillion, is a property that is not taxed, and remitted to the DGT, while the remaining Rp 2,700 trillion, a rich Indonesian deposits in banks abroad.[119]
Israel
Some 600 Israeli companies and 850 Israeli shareholders are listed.
Among the Israeli names found in the leaked documents are: top attorney Dov Weissglass, who was the bureau chief of deceased prime minister Ariel Sharon; Jacob Engel, a businessman active in the African mining industry; and Idan Ofer, a member of one of Israel's wealthiest families, according to Haaretz.[120] Tareq Abbas, a son of Mahmoud Abbas, the president of the Palestinian Authority, was also revealed to hold $1 million in shares of an offshore company associated with the Palestinian Authority.[121]Weissglass' name appears as a sole owner of one of four companies set up by his business partner Assaf Halkin. The company, Talaville Global, was registered in the British Virgin Islands in May 2012, according to Haaretz, and seven months later, all of its shares were mortgaged against a loan from a Vienna bank.
Weissglass and Halkin told Haaretz that the company "was registered for the purpose of receiving a loan from the bank in order to invest in European properties. The bank would only allow a loan to a corporation... [the] company activity is reported to the tax authorities in Israel. The required tax on the said activity is paid in Israel."[122]
Italy
On April 6 2016 Italy's Procura of Turin ordered Guardia di Finanza further investigation regarding the 800 Italians contained in the Panama Paper's documents.[123]
Mexico
The leaked files identified "favourite contractor" of Mexican President Enrique Peña Nieto[124]
According to Forbes, "Hinojosa and other prominent Mexicans, mostly businessmen with close ties to the government, including at least one member of the Forbes billionaires list, were the subject of extensive articles published on line by Proceso and Aristegui Noticias Sunday to coincide with the ICIJ posting of the Panama Papers."[126]
New Zealand
New Zealand's Inland Revenue Department said that they were working to obtain details of people who have tax residence in the country who may have been involved in arrangements facilitated by Mossack Fonseca.[127]Gerard Ryle, director of the International Consortium of Investigative Journalists, told Radio New Zealand on 8 April 2016 that New Zealand is a well-known tax haven and a "nice front for criminals".[128]
Norway
The Norwegian Tax Administration expects to demand access to information from DNB
(Norway's largest financial services group) about approximately 30
companies formed by DNB that are owned by Norwegians, 20 of whom are
living in Norway.[129] 200 Norwegians are on the client list of Mossack Fonseca.[130]
Pakistan
Nawaz Sharif – Prime Minister of Pakistan
As stated earlier, I do not own any company/property abroad. My brother has made me a trustee in one of his corporations which only entitles me to distribute assets to my brother Hussain's family/children if needed. Nothing more than what my brother has already explained. The info provided by leaks does not say any wrongdoing involved. Distortion is wilful that a couple of media channels using to settle scores.Samina Durrani, the mother-in-law of chief minister Shebaz Sharif from his second marriage and Ilyas Mehraj, his brother-in-law from his first marriage are also included in the documents.The late Benazir Bhutto and her nephew are also mentioned.[131]
Panama
The Procuraduría de la Nación announced that it will open an
investigation concerning the international journalistic investigation
"Panama papers", where Mossack Fonseca is involved.[133]
Minister of the Presidency, Alvaro Alemán categorically rejects that
Panama is considered a tax haven and ruled that no permit is used the
country as a "scapegoat", thus reacting to the scandal "Panama Papers"
and the subsequent re-registration by France in the list of tax havens.
Alemán criticized vigorously the statements made by the Secretary
General of the Organisation for Economic Co-operation and Development
(OECD) José Ángel Gurría and Minister of Finance of France, Michael
Sapin and considered as disrespectful and irresponsible, especially when
publications speak of a total of 21 jurisdictions, but only lash out at
Panama.[134]
Alemán explained that talks have started with the French ambassador in
Panama, with whom the issue will be discussed preliminarily and
establish avenues of understanding to clarify the situation being
implicated the country.[135]
Eduardo Morgan, from the Panamanian firm Morgan & Morgan accuses
the OECD of being behind the campaign to avoid competition that Panama
represents for the interests of other countries.[136]
The Panama Papers are a very serious issue for Panama because it
affects in an "unfair" manner the country's image and is not the result
of an investigation, but is a "hack". This was stated on April 5, by
Adolfo Linares, president of the Chamber of Commerce, Industries and
Agriculture of Panama (Cciap).[137]
The Colegio Nacional de Abogados de Panama (CNA) urged the Panamanian
government to sue anyone who has affected the country's image with the
massive leak of documents linking the Panamanian firm Mossack Fonseca
with the creation of companies to move capital evading taxes.[138]
Political analyst Mario Rognoni said that Panama is the most affected
in the whole scandal 'Panama Papers'. He said the world is pointing to
Panama as a tax haven and will depend on the policies adopted by the
authorities. On the government of President Juan Carlos Varela, he
believes he might be involved if he tries to cover up the responsibility
of those involved.[139]
Economist Rolando Gordon said this hurts the country that has just
emerged from the gray list of FATF. The US could ask Panama to modify
the law, he said. He explained that at this time is seen as a scandal,
but will each country, especially Panama to conduct investigations and
determine whether it is true that illegal or improper acts were
committed.[140]
Panama's Lawyers Movement listed as a 'cyber bullying or international
cyberterrorism' scandal called 'Panama Papers'. In a press conference,
the guild primarily condemned the attack on the country brand 'Panama'.
Fraguela Alfonso, president of the movement, said there is no doubt that
this is a direct attack on the country's financial system.'I invite all
organized forces of the country to create a great crusade for the
rescue of the country's image, "he said.He said that Panama is not a tax
haven and Panamanian corporations are widely used by the
Panamanians.The law firm Rubio, Alvarez, Solis & Abrego also reacted
and in a press release detailing that "in recent decades Panama has
been in the financial and most important services in Latin America and
the world plazas. Product of it all kinds of attacks on our service
system 'are encouraged.'[141]
The establishment of an offshore company is legal. The lawyer and
excontralor of the Republic Alvin Weeden explained that illegal is that
the product created or sold to others is used for money laundering or
arms smuggling, terrorism, tax evasion. This case was published on
Twitter: 'Is like you create an atomic bomb, you sell it to another
country and detonate them in another country'.[142]
Russia
Russian president Vladimir Putin with Russian businessman and oligarch Arkady Rotenberg
The documents leaked indicated that Sergei Roldugin, a professional cellist described by Novaya Gazeta as Vladimir Putin's best friend and the godfather of his eldest daughter, had acquired assets worth at least $100 million, including a 12.5% stake in Video International, Russia's largest television advertising firm.[144] It was also revealed that Roldugin had acquired these assets in what the BBC described as "suspicious deals".[145] Asked by journalists of Novaya Gazeta about his offshore accounts[146] Rodulgin said "I have to take a look and find out what I can say and what I can't", because, he said, financial matters are "delicate".[146]
Putin spokesperson Dmitry Peskov said that Western mainstream media reporting of the Panama Papers was engaged in "Putinophobia". He said the primary target of the leak was Vladimir Putin and the Panama Papers were part of a conspiracy against Russia, orchestrated by the Central Intelligence Agency, the United States Department of State and others.[147]
President Putin has denied "any element of corruption" over the Panama Papers leaks, saying his opponents are trying to destabilise Russia.[148]
Initially, aside from few independent outlets, Russian media entirely ignored the leak. Channel 1 and Rossiya 1, both state owned, did not mention the Panama Papers at all on April 4, when the story broke. When an opposition politician asked why the media was ignoring the story, Dmitry Kiselev, head of Rossiya Segodnya, refused to discuss or comment.[149] To the extent that some coverage was given to the story it was often done in the middle of the night, and focused exclusively on international celebrities rather than the links to Putin's circles found in the papers.[150] Coverage of the leak began to appear after Peskov's reaction, but generally focused on Peskov's comments rather than discussing the information in the Panama Papers.[150]
Saudi Arabia
Crown Prince Muhammad bin Nayef has also been named in association with the papers.[152]
Singapore
The Ministry of Finance and Monetary Authority of Singapore
said in a statement that "Singapore takes a serious view on tax evasion
and will not tolerate its business and financial centre being used to
facilitate tax related crimes. If there is evidence of wrongdoing by any
individual or entity in Singapore, we will not hesitate to take firm
action."[153]
Sweden
The Swedish Financial Supervisory Authority (FI) said on April 4, 2016 it would launch an investigation into the actions of Nordea,
one of the largest financial institutions in the Nordic countries,
after Panama Papers revealed the company's Luxembourg office had helped
to set up nearly 400 offshore companies for its clients. Later FI said
that they would also investigate the other three big banks in Sweden:
Handelsbanken, SEB and Swedbank.Nordea cut all ties with Mossack Fonseca following an interview with Nordea CEO Casper von Koskull on SVT on April 4.[15][69][154] The FI has pointed out that there are "serious deficiencies" in how Nordea monitors money laundering and has given the bank two warnings. In 2015 Nordea had to pay the largest possible fine – over 5 million EUR.[68]
Thailand
The Bangkok Post said that the "...Anti-Money Laundering Office
(AMLO) is seeking information from its foreign counterparts regarding
twenty-one Thai nationals reportedly included in a list of people
worldwide using a Panama-based law firm apparently specializing in money
laundering and tax evasion. It is not clear how why AMLO is
investigating only twentyone. The Panama Papers include at least 780
names of individuals based in Thailand and another fifty companies based
in Thailand. Some are foreigners or foreign-owned companiesm but 634
individual addresses in Thailand appear in the documents that have
surfaced to date, including the CEOs of giant companies Bangkok Land and Phatra Finance.[155]
Tunisia
The Tunis trial court prosecutor ordered a judicial inquiry opened
into the Panama Papers and the Tunisian political figures suspected of
hiring the firm. A judge from the Financial Judiciary Pole that is a
Tunisian specialized court in financial crimes was assigned to the case.[156] The Tunisian Assembly of the Representatives of the People established a parliamentary commission of inquiry as well[157]
Ukraine
Ukrainian president Petro Poroshenko
Anti-corruption group Transparency International believes that the "creation of businesses while serving as president is a direct violation of the constitution".[160] Also, journalists from the Organized Crime and Corruption Reporting Project believe that with the move Poroshenko committed two other illegalities, starting a new business while in office and failing afterwards to report it on his disclosure statements.[160]
Poroshenko denied any wrongdoing and a spokesman said the offshore company had no active assets and was a legitimate corporate restructure aimed at helping to sell Poroshenko's Roshen group.[160] Analysts in Ukraine responded that the secretive way Poroshenko set up these accounts was certain to undermine trust in him, his party and Ukraine itself.[161]
The news about Poroshenko's offshore business came as his government campaigned against offshore companies.[158] Oleh Lyashko, leader of the Radical Party, urged lawmakers to begin impeachment proceedings,[158] And even some of his allies backed calls for a parliamentary commission to investigate the allegations.[158]
In the Ukrainian Parliament, relations between the Poroshenko bloc and the People's Front party of Prime Minister Arseniy Yatsenyuk had over previous months already soured, with mutual accusations of corruption.[158]
United Arab Emirates
ICIJ, The Guardian and The Independent have reported that UAE President Khalifa bin Zayed Al Nahyan
owns London real estate worth more than £1.2 billion through a
structure of some thirty shell companies Mossack Fonseca set up for him
in the British Virgin Islands and administer for him, using them to manage and control the luxury properties in London.[162][163][164]
By December 2015, Mossack Fonseca held nearly all of the shares in
those companies in trust structures on his behalf, with the President
and his wife, son and daughter the trust beneficiaries.[164]
United Kingdom
 |
Wikinews has related news: Thousands march in London calling for David Cameron's resignation over tax affairs |
The Leader of the Opposition has called for an immediate independent investigation into the tax affairs of the family of British prime minister David Cameron (pictured).
Also included among the documents are the names of six members of the House of Lords, several of whom have been donors to Cameron's Conservative Party.[172][173]
Prominent members of the Labour Party criticized the involvement of the Cameron family in the scandal. Shadow Secretary of State for International Development Diane Abbott described the revelations as "the tip of the iceberg" and "a stitch up", and urged "meaningful reform" of the UK tax authority, HMRC,[174] while Shadow Chancellor of the Exchequer John McDonnell condemned the tax avoidance schemes as "immoral"[175] and described the allegations as "extremely serious", saying "HMRC should treat this with utmost priority and urgently launch investigation".[176] The Leader of the Opposition, Jeremy Corbyn, urged an immediate independent investigation into the tax affairs of the Prime Minister's family, as well as tighter laws on UK tax avoidance.[177] Former Liberal Democrat Home Office Minister Norman Baker calling for further investigation of David Cameron's activities.[178] Scottish National Party leader Nicola Sturgeon also called for a clampdown on UK tax avoidance which "stamps out this sort of behavour" and called for "utter transparency" from David Cameron, adding that "what shocks people most about some of this is that it is not illegal".[179]
Calls were made for the Prime Minister's resignation, especially after he admitted owning shares in his father's offshore company.[180] Describing Prime Minister David Cameron as the "most hypocritical prime minister of my lifetime", former Mayor of London Ken Livingstone said that "he shouldn't just resign, he should be sent to prison".[181] Former leader of the SNP Alex Salmond also accused Cameron of "misleading the public" but said that "I'm not calling for his resignation until I get answers" to Cameron not registering offshore investment funds while an MP.[182]
As the United Kingdom still exercises varying degrees of control over British Overseas Territories and Crown dependencies which make up a large number of the many tax havens and 'secrecy jurisdictions' that exist, pressure has mounted on Prime Minister David Cameron to make changes.[183][184] According to the Wall Street Journal, the Panama Papers "are shining a light on the constellation of offshore centers in the last remnants of the British Empire, from Gibraltar to the British Virgin Islands."[183] Of the companies handled by Mossack Fonseca which were included in the leaked data, British Overseas Territory the BVI topped the list, with 113,000 of the nearly 215,000 companies that Mossack Fonseca managed incorporated there. British Overseas Territory Anguilla was 7th on the list.[185]
Protesters outside 10 Downing Street call for David Cameron's resignation, 9 April 2016
Leader of the Opposition Jeremy Corbyn, said "The government needs to stop pussyfooting around on tax dodging"[187] and called for "direct rule" to be imposed over British Overseas Territories and Crown dependencies that act as tax havens,[188] a move former Business Secretary Vince Cable agreed with, although former attorney general Dominic Grieve described it as a "bit of a nuclear option"[189] which would "destroy the livelihoods" of BVI inhabitants in the finance industry.[190] The Labour Party also said that Cameron's plans for an "anti-corruption" summit in May[191] would be "a charade" if Cameron, as chair of the summit, did not require representatives of all Crown dependencies and overseas territories to attend.[175]
Jennie Granger, a spokeswoman for HMRC said that the department had received "a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation". She said HMRC had asked ICIJ to share all its data.[51][192] UK media[193][194] revealed that Edward Troup, appointed executive chair of HMRC in April 2016, was a former partner with Simmons & Simmons, the London-based legal firm whose clients included the Panama-registered fund created by David Cameron’s father, Blairmore Holdings.[193][194]
United States
McClatchy Newspapers,
the only participating US news organization, has found four Americans
in the documents, all of whom were previously either accused or
convicted of financial crimes such as fraud and tax evasion.[40] In 2008, Mossack Fonseca reportedly utilized a 90-year-old British man to conceal the offshore accounts of Marianna Olszewski, a well-known US businesswoman.[195]The lack of Americans in the leak has been suggested to be due to the facts that: shell companies can be created in the United States, major international banks based in America tend to have offshore accounts in the Cayman Islands and US laws like the Foreign Account Tax Compliance Act (FATCA) and other cross-border initiatives had meant that the "tax evasion game [was] principally over for American taxpayers."[196]
In response to the lack of American individuals in the documents, the editor of Süddeutsche Zeitung said: "Just wait for what is coming next."[197]
United States president Barack Obama addressed the leak during a press conference and said: "It's not that they're breaking the laws, it's that the laws are so poorly designed that they allow people, if they've got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having to abide by."[198]
According to Eoin Higgins and the The New Yorker, the Panama Free Trade Agreement actually forced Panama to release to the American regulatory authorities information on "the ownership of companies, partnerships, trusts, foundations, and other persons" which is why so few Americans' names are presented in the papers. Higgins stated "If Panama had ever been an attractive destination for American offshore storage of funds, this agreement shut the door on that possibility."[199][200]
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