PANAMA PAPERS

UPDATE

On Tuesday, April 12, 2016, police entered the Mossack Fonseca Panama offices under the command of a prosecutor who specializes in organized crime and money laundering.  Some question the government’s delay in investigating the Mossack Fonseca offices stating; “The day after the Panama Papers revelations came to light the Panama government should have intervened immediately in Mossack Fonseca. They should have collected the data, the computer, gotten all of the evidence,”  “A lot of evidence could have been diluted, altered.”

A United Nations expert called for the need to end tax secrecy, saying: “Tax evasion destroys trust in public institutions and the rule of law, and shrinks the fiscal space for investing in public healthcare, education, social security and other goods and services,”.

“Public funds that are essential to guarantee economic, social and cultural rights to all are robbed by tax evaders.”

Mossack Fonseca has denied any wrongdoing.

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A huge leak of documents revealed how the rich and powerful use tax havens to hide their wealth.  The leak is referred to as Panama Papers.  The files were leaked from one of the world’s most secretive companies, a Panamanian law firm called Mossack Fonseca.  Over 11-million documents were obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ). The ICIJ has worked with journalists from 107 media organizations in 76 countries to analyze the documents for over a year. 

Although there are legitimate ways of using tax havens, what appears to be going on is about hiding true owners of money or origin of money and avoiding paying tax on money.  A main allegation is the creation of shell companies, which have the outward appearance of being legitimate businesses, but are empty shells.  They do nothing but manage money, while hiding who owns that money.

Mossack Fonseca has denied that the Panama Papers establish any wrongdoing, noting there is nothing illegal about setting up offshore companies. There are legitimate reasons why people might want anonymity or to protect their money overseas.  A 2012 study reported that at least $21 trillion, perhaps as much as $31 trillion has been parked in offshore accounts to put it out of reach of various authorities and Mossack Fonseca has set up more that 240,000 offshore companies.

Panama Papers links 12 current or former heads of state and government s in the files, including dictator accused of looting their own counties. Click here for a current list of names. The Panama Papers leak has revealed that more than 500 banks, including their subsidiaries and branches, registered nearly 15,600 shell companies with Mossack Fonseca.

The British Broadcasting Corporation (BBC) does not know the identity of the source but the firm says it has been the victim of a hack from servers broad.

I encourage your comments and feedback.

 


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