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Panama Papers Reveal Elite's Tax Havens - ASHARQ AL-AWSAT English Archive
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Eleven million confidential documents were leaked from one of the world’s most secretive companies, Panamanian law firm Mossack Fonseca.
Authorities across the globe have opened investigations into the activities of the world’s rich and powerful after the controversial documents showed possible wrongdoing using offshore company structures.

The “Panama Papers” have cast light on the financial arrangements of prominent celebrities, politicians and public figures and the companies and financial institutions they use for such activities.

They show how Mossack Fonseca has helped clients launder money, dodge sanctions and avoid tax.

Among those named in the documents are 12 current or former heads of state and at least 60 people linked to current or former world leaders in the data. They include friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain, Iceland and Pakistan, and the president of Ukraine.

The documents also named at least 33 figures and companies listed on the U.S. Department of State for dealing with Hezbollah, Iran and North Korea.

Leading figures and financial institutions responded to the massive leak of more than 11.5 million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the U.S.-based International Consortium of Investigative Journalists (ICIJ) and other media organizations.

Following the reports, China has moved to limit local access to coverage of the matter with state media denouncing Western reporting on the leak as biased against non-Western leaders.

Searches for the word “Panama” on Chinese search engines bring up stories in Chinese media on the topic, but many of the links have been disabled or only open onto stories about allegations directed at sports stars.

France, Australia, New Zealand, Austria, Sweden and the Netherlands are among nations that have commenced investigations, and some other countries, included the United States, said they were looking into the matter.

French President Francois Hollande hailed the “good revelations” which would “increase tax revenues from those who commit fraud”.

Mossack Fonseca, the Panamanian law firm at the centre of the leaks, has set up more than 240,000 offshore companies for clients around the globe and denies any wrongdoing. It calls itself the victim of a campaign against privacy and claims media reports misrepresent the nature of its business.

The company says it has operated beyond reproach for 40 years and has never been charged with criminal wrong-doing.

In a statement, Mossack Fonseca said: “Your allegations that we provide structures supposedly designed to hide the identity of the real owners, are completely unsupported and false.

“We do not provide beneficiary services to deceive banks. It is difficult, not to say impossible, not to provide banks with the identity of final beneficiaries and the origin of funds.”

Credit Suisse and HSBC, two of the world’s largest wealth managers, on Tuesday dismissed suggestions they were actively using offshore structures to help clients cheat on their taxes.

Both were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another, according to ICIJ.

Credit Suisse CEO Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets.
Speaking at a media briefing in Hong Kong, he acknowledged the bank uses offshore financial structures, but only for very wealthy customers with assets in multiple jurisdictions and did not support their use for tax avoidance or allow them without knowing the identities of all those concerned.

“We do not condone structures for tax avoidance,” he said. “Whenever there is a structure with a third party beneficiary we insist to know the identity of that beneficiary.”

Separately, HSBC said the documents pre-dated a thorough reform of its business model.

Both banks have in recent years paid large fines to U.S. authorities over their wealth management or banking operations.

Credit Suisse agreed in 2014 to pay a $2.5 billion fine for helping rich Americans evade taxes. HSBC agreed in 2012 to pay $1.92 billion in fines, mainly for allowing itself to be used to launder Mexican drug money.

Asharq Al-Awsat English

Asharq Al-Awsat English

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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