1 of 1- Just Fred
- Duke of Cortona
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- Posts: 3,863
The Panama Papers
Keep tabs on this one. Maybe the biggest corruption and ripoff scandal in human history. There are plenty of sites splattered all over the interwebs exposing this. A truly global scandal.
- Rongone
- Sentient Being
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- From: Keeping Calm, Sailing On
- Registered: 1/31/2015
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Re: The Panama Papers
I enjoyed Mossack-Fonseca's response to the release of the papers and their relationships with the unsavory client list. It's kinda like 'don't blame us, we're an upstanding, law abiding firm, we didn't know about the client connections, etc., etc. etc.". They take no responsibility and, it seems to me, they need to spend a little time on vetting their clients rather than setting them up and raking in some hefty fees.
Mossack Fonseca’s response to the Panama Papers
Sunday 3 April 2016 13.52 EDT
The Panama papers consist of millions of files leaked from the database of the Panama-based law firm Mossack Fonesca. Here is the company’s response to the leak in full.
We cannot provide responses to questions that pertain to specific matters, as doing so would be a breach of our policies and legal obligation to maintain client confidentiality. However, we can confirm the parties in many of the circumstances you cite are not and have never been clients of Mossack Fonseca.
We provide company incorporation and related administrative services that are widely available and commonly used worldwide.
It is legal and common for companies to establish commercial entities in different jurisdictions for a variety of legitimate reasons, including conducting cross-border mergers and acquisitions, bankruptcies, estate planning, personal safety, restructuring and pooling of investment capital from different jurisdictions in neutral legal and tax regimes that does not benefit or disadvantage any one investor.
Our services are regulated on multiple levels, often by overlapping agencies, and we have a strong compliance record.
In addition, we have always complied with international protocols … to assure as is reasonably possible, that the companies we incorporate are not being used for tax evasion, money laundering, terrorist finance or other illicit purposes.
We are responsible members of the global financial and business community.
We conduct thorough due diligence on all new and prospective clients that often exceeds in stringency the existing rules and standards to which we and others are bound.
Many of our clients come through established and reputable law firms and financial institutions across the world, including the major correspondent banks, which are also bound by international “know your client” (KYC) protocols and their own domestic regulations and laws.
The documents you cite in your reporting show that we routinely deny services to individuals who are compromised or who fail to provide information we need in order to comply with our KYC and other obligations.
For 40 years Mossack Fonseca has operated beyond reproach in our home country and in other jurisdictions where we have operations. Our firm has never been accused or charged in connection with criminal wrongdoing.
However, we are legally and practically limited in our ability to regulate the use of companies we incorporate or to which we provide other services.
We are not involved in managing our clients’ companies. Excluding the professional fees we earn, we do not take possession or custody of clients’ money, or have anything to do with any of the direct financial aspects related to operating their businesses.
All of the jurisdictions where we have operations have made significant strides in their efforts to comply with global protocols to prevent abuse of their financial and corporate systems. This includes preventing money laundering, combatting terrorist financing and preventing tax evasion.
Most of the jurisdictions have formal tax information exchange agreements with several countries that are approved by the Organisation for Economic Cooperation and Development (OECD).
We regret any misuse of our services and actively take steps to prevent it.
We regret any misuse of companies that we incorporate or the services we provide and take steps wherever possible to uncover and stop such use. If we detect suspicious activity or misconduct, we are quick to report it to the authorities. Similarly, when authorities approach us with evidence of possible misconduct, we always cooperate fully with them.
With regards to some of the allegations, we would like to comment as follows:
Tax evasion and avoidance: we strongly disagree with any statement implying that the primary function of the services we provide is to facilitate tax avoidance and/or evasion.
Due diligence on clients: approximately 90% of our clientele is comprised of professional clients, such as international financial institutions as well as prominent law and accounting firms, who act as intermediaries and most of them are regulated in the jurisdiction of their business.
Most of the persons mentioned by you are not our clients nor do they appear in our database as persons related to the companies we formed. Due diligence procedures were carried out in accordance with the laws in place at the time the companies and cases you made reference to were incorporated and in existence.
A significant percentage of our clients are banking institutions, trust companies, lawyers, and accountants who are also obliged to perform due diligence on their clients.
Politically exposed persons (PEPs): we have duly established policies and procedures to identify and handle those cases where individuals either qualify as PEPs or are related to them. As per our risk based approach, PEPs are considered to be high-risk individuals. PEPs do not have to be rejected just for being so; it is just a matter of proper risk analysis and administration.
Sanctions lists and convicted criminals: our company does not foster or promote unlawful acts.
We have our own procedures in place to identify such situations, to the extent it is reasonably possible. Once these types of situations are identified, we routinely discontinue the provision of our services.
The time it takes for us to resign as registered agent from the involved companies varies depending on our internal procedures and the regulations of the respective country or jurisdiction. Sometimes the authorities require the registered agent not to file any resignation in order to prevent obstructing their investigation.
We would like to take this opportunity to clarify that we have never knowingly allowed the use of our companies by individuals having any relationship with North Korea, Zimbabwe, Syria, and other countries mentioned by you that might have been considered as a threat to any other country’s national security or that have been listed by a sanctioning body.
If for some reason, unbeknownst to us, some company formed by us ended up in the hands of people having such relations for whatever criminal or unlawful purpose, we strongly condemned that situation and took and will continue taking any measures that are reasonably available to us.
Allegations that we provide shareholders with structures supposedly designed to hide the identity of the real owners are completely unsupported and false.
We will not answer any questions related to private information regarding our company founding partners as we do not see the public interest behind said inquiries. Likewise, we will not make any reference to the statistics and other “factual” information about numbers and amounts since they are far from being accurate. In relation to our asset management company, same does not have the capacity by law to use, move, or dispose of in any way their clients’ money.
You may consider this document as our response. However, it should not be considered as a validation of the information contained therein, and especially to the method by which said information was obtained.
It appears that you have had unauthorized access to proprietary documents and information taken from our company and have presented and interpreted them out of context. We trust that you are fully aware that using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies.
Kind regards
Carlos Sousa
Public relations director
Mossack Fonseca & Co. (Panama)
In a further response, Mossack Fonseca added: “Over the last 18 months, we have reinforced our compliance department by hiring an additional 26 professionals to comply with new regulations as well as to conduct retroactive due diligence on all existing clients.
“Finally, the instances you cite in your reporting represent a fraction – less than 1% – of the approximately 300,000 companies that Mossack Fonseca has incorporated in its over 40 years in operation. This fact shows that the vast majority of our clients use companies we incorporate for legitimate uses and that our due diligence and compliance procedures are overwhelmingly successful in thwarting those who have other intentions.”
Reminds me of the old descriptive phrase: "non-denial denial". I think we're going to see a lot of this from governments, groups, corporations, and individuals connected with these documents.
"Lucy, you got some 'splaining to do ! ! !"
Last edited by Rongone (4/05/2016 7:16 am)
- Rongone
- Sentient Being
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- Registered: 1/31/2015
- Posts: 2,872
Re: The Panama Papers
U.S. Banking institutions supported by the federal legislature and lobbyists say to the world, "Do as I say, not as I do".
A top haven for tax cheats that may surprise you: the US
WASHINGTON (AP) – The U.S. lambastes and strong-arms countries that help drug lords and millionaire investors hide their money from tax collectors. Critics say it should look closer to home.
America itself is emerging as a top tax haven alongside the likes of Switzerland, the Cayman Islands and Panama, those seeking reform of the international tax system say. And states such as Delaware, Nevada, South Dakota and Wyoming, in particular, are competing with each other to provide foreigners with the secrecy they crave.
“There’s a big neon sign saying the U.S. is open to tax cheats,” says John Christensen, executive director of the Tax Justice Network.
America’s openness to foreign tax evaders is coming under new scrutiny after the leak this week of 11.5 million confidential documents from a Panamanian law firm. The Panama Papers show how some of the world’s richest people hide assets in shell companies to avoid paying taxes.
Christensen’s group, which campaigns for a global crackdown on tax evaders, says the United States ranks third in the world in financial secrecy, behind Switzerland and Hong Kong but ahead of notorious tax havens such as the Cayman Islands and Luxembourg.
Under a 2010 law, passed after it was learned that the Swiss bank UBS helped thousands of Americans evade U.S. taxes, the United States demands that banks and other financial institutions disclose information on Americans abroad to make sure they pay their U.S. taxes.
But the U.S. doesn’t automatically return the favor.
More than 90 countries have signed on to a 2014 information-sharing agreement set up by the Organization for Economic Cooperation and Development; the U.S. is among the few that haven’t joined. American banks don’t even collect the kind of information foreign countries would need to identify tax dodgers.
“The banking lobby has resisted changes in the law that would allow more sharing of data,” says Peter Cotorceanu, a Zurich-based lawyer who specializes in private banking.
In a report last year, the Tax Justice Network complained that “Washington’s independent-minded approach risks tearing a giant hole in international efforts to crack down on tax evasion, money laundering and financial crime.” It said foreign elites have “used the United States as a bolt-hole for looted wealth.”
Pascal Saint-Amans, head of the OECD’s Center for Tax Policy and Administration, says the U.S. often makes information available to other countries upon request. But that means countries can get details only on those they already suspect of tax evasion.
Christensen says Swiss banks report that “many of their tax-dodging clients are talking about moving to the U.S. You go to Switzerland, and that’s all they’re talking about.”
Individual states, including Nevada, Wyoming and South Dakota, are making things worse, critics say.
They compete with each other to make it easier to set up corporations — few questions asked about who’s behind the business. “We have states that set up corporations where there’s no information about ownership,” says Jack Blum, a Washington lawyer who specializes in financial crime. “The states make a lot of money doing that.”
Nevada, for instance, makes it easy to incorporate secretly and charges a $500 annual business license fee for corporations and $200 for other businesses. Lawmakers granted business entities greater protection against lawsuits in 2001, hoping to attract more of them and use incorporation filing revenue to raise teacher salaries.
“Nevadans will continue to see nefarious business practices like those reported in the Panama Papers if state officials don’t change the laws of incorporation,” says Rep. Dina Titus, D-Nevada. “It is time for the state to tighten its disclosure and liability laws and remove the sign from our front yard that says: ‘Sleazeballs and rip-off artists welcome.’”
Nevada’s registered agent industry, which helps businesses incorporate in the state, supports about 1,000 jobs and pumps $110 million into the state economy every year, says the Nevada Registered Agents Association. The group opposed an effort last year to raise the business license fee.
“Nevada has promoted itself for decades as a ‘business friendly’ state, and that benefit is critical to keep new entities incorporating in Nevada,” says Matthew Taylor, a former association president and current board member.
But doubts are rising, even in Nevada. Many of the businesses are mere shells, financial contrivances that don’t employ people or make any investments.
“Historically, we have marketed ourselves as kind of a Wild West, frontier sort of place,” says Pat Hickey, a Republican in the Nevada Assembly. Now, Hickey wonders, “Don’t we want businesses that actually reside here, provide services or manufacture things? … I don’t know it’s necessarily an industry that we need to bend over backward to keep.”
South Dakota says its favorable trust laws provide an attractive place for families to park and grow their wealth, and it can all be done outside the public eye. The state imposes no tax on assets held in trust and allows the entire court file to be sealed permanently with a simple petition.
In 2014, a group of academics looked at tax havens for their book “Global Shell Games.” Posing as investors who wanted to set up businesses in different places, they kept track of whether the consultants helping them incorporate asked for basic information such as photo IDs or other documents that proved who they were. In the United States, only 25 percent did; in Delaware, only 6 percent.
The U.S. Treasury Department says it plans to propose regulations requiring foreign-owned “limited liability companies” to get tax identification numbers disclosing the identities of their owners. Once the rules are in place, Treasury says in a statement, the Internal Revenue Service will be better equipped to respond to requests for help from foreign governments.
Still, Treasury says, Congress needs to come up with a broader, better solution. Lawyer Cotorceanu doubts that will ever happen.
American lawmakers “do not want to hurt the U.S.’s banking industry,” he wrote last year in the journal Trusts & Trustees. “It is no secret that U.S. banks, particularly in Miami, are awash in undeclared Latin American money. … How ironic — no, how perverse — that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour.”
- TraderJay
- Exchanger
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- Registered: 3/11/2015
- Posts: 69
Re: The Panama Papers
Interesting articles. Things to come ?