A group of the world’s top tax officials will meet next week in Paris to delve into the details of the Panama Papers and determine how they can better combat tax avoidance. The prime minister of Iceland, for example, resigned earlier today over revelations that he owned a shell company in the British Virgin Islands. He took to task countries like Panama that facilitate such secretive, low-tax accounts.
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Panama, on the other hand, complains it has been unfairly stigmatized by media coverage of the Panama Papers and points to laws in some European countries that are not much tighter than its own. The Treasury Department accused Mossack Fonseca of knowingly representing Pangates International after the US blacklisted the company for its role in providing aviation fuel to the Syrian National Air Force.
Fonseca amusingly dismissed the virtually nonexistent diligence his firm practiced over its more questionable clients – some of whom were under worldwide sanctions – by saying, “We’re not flawless, and some surely escape by”. “But in all our years in business we’ve never been accused or condemned by a court”.
Europe is also home to countries that provide banking secrecy that could provide haven from taxes, such as Luxembourg, Switzerland and Andorra.
Since the first reports based on Mossack Fonseca documents were published Sunday, prominent politicians, celebrities and businesspeople have had their offshore business dealings dragged into the spotlight.
Panama’s President Juan Carlos Varela assured his French counterpart Francois Hollande on Friday (Saturday in Manila) his country was committed to cooperating in the fight against money laundering, his office said.
Governments across the world have started investigating possible financial wrongdoing by the rich and powerful after the leak of millions of documents from the law firm that span several decades. Once the actual names are made public, seeing them reported by the media is no sure thing – Justice Minister Gen. Paiboon Koomchaya said they should not be reported as their financial arrangements were a “personal matter”.
Officials from Mossack Fonseca in Panama were not immediately available for comment.
After days of pressure, the Prime Minister acknowledged he had benefited from a controversial fund set up by his late father Ian. They had paid 12,497 pounds for the shares in 1997.
The AP suggests the shortage of American clients might be due to more generous opportunities under American law to create the sort of corporations Mossack Fonseca specialized in establishing, particularly in states like Wyoming, Delaware, and Nevada. There’s no indication the offshore fund was set up to avoid taxes but the revelation reinforced the prime minister’s image as a scion of wealth and undermined calls to boost transparency at a time many British overseas territories act as tax havens. French and German authorities, which have also begun investigating, told financial companies to submit any information on involvement in the scandal.
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Russian President Vladimir Putin, meanwhile, denied having any links to offshore accounts and described the document leaks as part of a U.S.-led plot to weaken Russia even though his name doesn’t appear in any of the leaked records.
