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Panama firm's clients named in worldwide leak

Monday, 4 April, 2016

Millions of confidential client records from the Panama law firm Mossack Fonseca, dating back 40 years, have been stolen and leaked to the worldwide media and national tax authorities.

Newspaper reports today allege that they link more than 214,000 offshore entities to wealthy persons, including 140 politically exposed persons.

The files were obtained by the so-called International Consortium of Investigative Journalists (ICIJ), apparently by penetrating Mossack's computer security. ICIJ claims it 'reveals the offshore holdings of 140 politicians and public officials around the world – including 12 current and former world leaders, among them the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia'. They also document substantial transactions 'secretly shuffled through banks and shadow companies by associates of Russian President Vladimir Putin'.

ICIJ says the documents show that major banks have driven the creation of nominee companies in offshore jurisdictions. ‘More than 500 banks, their subsidiaries and their branches – including HSBC, UBS and Société Générale – created more than 15,000 offshore companies for their customers through Mossack Fonseca’, it says. ICIJ director Gerard Ryle described the leak as 'probably the biggest blow the offshore world has ever taken'.

The tax authorities of both the UK and Australia confirmed they had received copies of the documents and intended to 'act on it swiftly and appropriately'.

'Panama is a popular location for this kind of structure, especially for those who are internationally mobile, and those who spend a lot of time in the Americas', commented Fiona Fernie TEP, head of tax investigations at international law firm Pinsent Masons. 'Any individual with UK tax affairs whose name is involved in the data leak – even those whose affairs are entirely legitimate – should seek professional advice immediately, as HMRC is likely to contact them very soon.'

The Australian Tax Office said the Mossack files contained names of a 'significant number' of Australian residents. 'Currently we have identified over 800 individual taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong', it said.

Mossack Fonseca has about 600 employees in 42 countries, specialising in offshore financial services. The firm issued a statement denying any wrongdoing and noting that many of the named parties have never been its clients. 'We strongly disagree with any statement implying that the primary function of the services we provide is to facilitate tax avoidance and/or evasion', it said.

Sources