Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland, resigned 36 hours after it emerged that his wife held secret interests in the country’s bailed-out banks.
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U.S. President Barack Obama said the Panama Papers showed tax avoidance was a major problem and urged the U.S. Congress to take action to stop U.S. companies from taking advantage of loopholes allowing them to avoid paying taxes.
The Panamanian company Mossack Fonseca, which is at the centre of a global furor over a massive document leak revealing how thousands of people and entities use offshore tax havens, had a foray into British Columbia in the late 1990s, The Vancouver Sun has learned. Starting on Sunday, more than 100 news organizations filed reports based on the leaked information.
David Cameron is under pressure to order an investigation into those named in the Panama papers, including his own family, as the biggest data leak in history claimed its first political casualty.
The announcement that Gunnlaugsson was stepping down as leader of Iceland’s coalition government came from his deputy, Sigurdur Ingi Johannsson, who is also the country’s agriculture minister.
No replacement has yet been named, and President Olafur Ragnar Grimsson did not immediately confirm that he had accepted the resignation.
He added: “I would say that no government, no prime minister has done more to make sure we crack down on tax evasion, on aggressive tax avoidance, on aggressive tax planning, both here in the United Kingdom and internationally. The richest must pay their way”, he said.
German daily Suddeutsche Zeitung reported Tuesday that at least 28 German banks, including UBS Deutschland, Deutsche Bank and Commerzbank had set up around 1,200 shell companies in the last 25 years using Mossack Fonseca.
Iceland, a volcanic North Atlantic island nation with a population of 330,000, was rocked by a prolonged financial crisis when its main commercial banks collapsed within a week of one another in 2008.
Gudlaugur Thor Thordarson, chairman of the Independence Party, criticized the prime minister for unilaterally seeking to dissolve parliament.
In Beijing, there was no official reaction to ICIJ allegations that eight current or former members of the Chinese Communist Party’s most powerful body concealed their fortunes through offshore havens, as well as relatives of Xi, who has overseen a much-publicized anti-corruption drive.
Among those named in the leaked documents was the brother-in-law of President Xi Jinping. The state media are ignoring the reports, and search results for the words “Panama documents” have been blocked on websites and social media.
The Chinese government has called the revelations “groundless accusations”. It is time to get tough on tax havens. These companies have the outward appearance of being a legitimate business but in reality are just empty shells. They are sucking tax revenues out of our own country and many others fuelling inequality and short-changing our public services and our people.
We’re now seeing the extent of that practice in other countries, largely in Europe.
Offshore financial dealings are not illegal in themselves, but can be used to hide assets from tax authorities, launder the proceeds of criminal activities or conceal misappropriated or politically inconvenient wealth.
The firm’s response: Mossack Fonseca has denied wrongdoing, saying it has only assisted clients in setting up legitimate companies. The firm provided longer statements to ICIJ.
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In 2013, The Economist estimated that around US$20 trillion could be stashed in offshore accounts worldwide. “Of course, the documents started as a trickle but turned into a flood, a torrent in the end”, says Ryle.
