8/18/2019 Panama Papers: The Mossack Fonseca Investigations Begin

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Panama Papers: The Mossack Fonseca Investigations Begin

Panama Papers: The Mossack Fonseca Investigations Begin - The Atlantic

The reports have led to protests in major cities, sharp criticism of some world leaders, investigations

of others, and the resignation of Iceland's prime minister. The practices described in the reports arenot necessarily illegal, but they reveal tax and privacy laws in Panama and other tax havens that are

friendly to wealthy foreign investors and could be, with little effort, exploited for more nefarious

purposes.

Mossack Fonseca has denied any wrongdoing and says all of its operations are legal. Shortly after

the existence of the leak was reported, the law firm released a statement explaining it is not involvedin how the accounts and shell companies it opens for foreign investors are used.

"This is a tropical storm, like the ones we have here in Panama where once it passes the sun will

come out," Roman Fonseca, one of the firm's founders, said in an interview with Reuters last week.

"I guarantee you that we will not be found guilty of anything."

The raid comes after a similar search at Mossack Fonseca's offices in San Salvador, where El

Salvadorian authorities seized about 20 computers and documents last Friday, according to Reuters.

El Salvador's attorney general said the government decided to go through the offices after a

Mossack Fonseca sign was removed there, which reportedly raised suspicions. Check this articleout! I really enjoyed it. I hope you do...Reuters points out that the El Salvador office is not listed on

Mossack Fonseca's corporate website. The website lists an office each in five territories, 28 offices in

21 countries, and one in Hong Kong.

Mossack Fonseca said after the leak that it has never been accused or charged in connection with

criminal wrongdoing. In January, Brazilian authorities accused five Mossack Fonseca employees of 

money laundering and corruption and charged two of them. The Panama office denied any

involvement, saying the Brazil office was an "independent entity" that "operates with its own

administration, resources, and staff that are independent of our group."

Mossack Fonseca has had its share of run-ins with the law abroad, as my colleague David Graham

reported following the leak:

8/18/2019 Panama Papers: The Mossack Fonseca Investigations Begin

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In 2012 and 2013, [British Virgin Islands] regulators fined the company for violating money-

laundering protections on several occasions, including one involving the son of toppled Egyptian

dictator Hosni Mubarak. ... German authorities raided homes and an office of Commerzbank in

Frankfurt in spring 2015, and reportedly told journalists they were considering charges against

[Mossack Fonseca] employees over tax evasion.

Panama's President Juan Carlos Varela announced last week the creation of an international panel

aimed at improving transparency in Panama's offshore financial industry, one of the oldest in the

 Americas. Varela spoke of the potential for possible changes in the country's financial sector.

Panama has more than 350,000 international business companies--the kind Mossack Fonseca

manages--registered, the third-largest number in the world after Hong Kong and the British Virgin

Islands, according to the Financial Secrecy Index. The index ranks jurisdictions based on their

offshore financial activities, with higher ranks indicating greater secrecy. The index places Panama

13th out of 92 jurisdictions, behind territories like the Cayman Islands and Macao and nations like

the Switzerland, the United States, and Germany.

Panama has made legal and regulatory changes to address money-laundering concerns in recent

 years. Those efforts have been applauded by watchdog groups, but legal experts warn the practice

remains widespread.

http://www.theatlantic.com/international/archive/2016/04/panama-papers-mossack-fonseca-raid/478

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