Daily Management Review

How Authorities of Different Countries Responded to 'Panamagate'


Publication of an investigation on offshore companies in Panama has caused the first reaction of governments and the tax bodies. Tax authorities in Australia began checking more than 800 of its citizens, mentioned in the "Panamanian files." French President Francois Hollande called the information revealed yesterday by the International Consortium of Investigative Journalism (ICIJ) "good news", and declared his readiness to start legal proceedings. Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson can retire due to involvement in the offshore scandal. Meanwhile, government of Panama announced that it will assist in any investigation related to the documents from the archive of the law firm Mossack Fonseca. Mossack Fonseca itself considered ICIJ publication as a "criminal offense".

The National Archives (United Kingdom)
The National Archives (United Kingdom)
The Government of Panama said they are ready to assist in any investigation, which may start after yesterday's publication of the International Consortium of Investigative Journalism (ICIJ). The organization disclosed more than 11.5 million documents from the archives of the law firm Mossack Fonseca, based in the tax haven of Panama. "The Panamanian government will actively cooperate in any inquiry and will provide the necessary assistance in the event of any legal action," - says a statement released by the presidential administration of Panama.

Recall that Mossac Fonseca’s database, access to which gained ICIJ, featured family members of President Xi Jinping, the President of Ukraine Petro Poroshenko, President of Azerbaijan Ilham Aliyev, the King of Morocco Mohammed VI and Saudi King Salman bin Abdul-Aziz Al Saud, late father the current British Prime Minister David Cameron. The document also mentions a number of individuals close to the president of Russia Vladimir Putin. 

Meanwhile, the authenticity of the documents has not been confirmed yet, and a representative of Mossack Fonseca made a statement in which he called ICIJ’s disclosure «crime», and refused to believe in their authenticity. "This is a crime, a criminal offense", - one of the founders, Ramon Fonseca, told to France-Presse, adding that this is an attack on Panama since some countries do not like the company's success in attracting customers.

Meanwhile, French President Francois Hollande called the scandalous data "good news" and declared his readiness to start legal proceedings. "Any received information will give grounds the tax authorities to initiate an investigation, and will entail legal proceedings", - said Mr. Hollande during a visit to the Paris suburb of Boulogne-Billancourt.

The UK authorities have requested copies of the "Panamanian files" to examine them and take appropriate measures to combat tax evasion, Reuters reported. In addition, Sweden's financial regulator asked the Luxembourg authorities for information on the Nordea bank, which, according to ICIJ’s documents, helped some of its clients to open accounts in offshore zones. Minister of Finance of Belgium, Johan van Overtveldt confirmed his intention to initiate own investigation based on ICIJ publications related to 732 Belgian. "First of all, we should try to identify all persons who are involved in this. On the other hand, it is necessary to find out whether it is fraud or tax evasion," - said Mr. van Overtveldt. Spain, Austria and the Netherlands also announced launch of their own investigation in connection with the disclosure. Pakistani authorities, meanwhile, denied any relation of Prime Minister Muhammad Nawaz Sharif, another person involved in the database, to offshore companies associated with Mossack Fonseca.  

Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson, also appearing in the database Mossack Fonseca data, interrupted his interview after being asked about his offshore company Wintris Inc., stating that he has "never had hidden assets." Mr. Gunnlaugsson can retire due to involvement in the offshore scandal. Opposition leaders have accused the prime minister of concealing important financial conflicts of interest from voters and demanded early elections, according to The Guardian. ICIJ’s revelation about Panamanian offshore activities of Gunnlaugsson run counter to his image of a defender of the collapsed Icelandic financial system from foreign creditors' claims, whom he repeatedly called "vultures".

At the same time, Anti-Corruption Bureau of Ukraine stated that it will not investigate information about President Petro Poroshenko’s offshore, explaining that the current president is not subject to the National Anti-Corruption Bureau of Ukraine (NABU)’s investigation. The organization has no authority to start a pre-trial investigation against his, according to NABU’s page to Facebook.

Today, the Australian Tax Office (ATO) announced launching of checks on hundreds of Australian citizens, mentioned in the so-called Panamanian files. ATO’s statement says: "We found information on more than 800 taxpayers and educed that about 120 of them are associated with a Hong Kong company that provides services for working with offshore jurisdictions."

Deputy Director of the Australian Tax Service Michael Cranston said that his agency had initiated a program to identify illegal use of offshore companies even before "Panamanian files" publication. He noted that the publication is well complement to the already available information and will help continue to "conduct checks, impose penalties and, in especially serious cases, proceed legally." Mr. Cranston said: "We want everyone to clearly understand our position - taxpayers cannot rely on such secret agreements, and we will actively respond to such things in obtaining relevant information."

In turn, representatives of the Tax Service of New Zealand stated that they are working closely with its partners in the exchange of tax information to retrieve data about the citizens of New Zealand mentioned in the "Panamanian files." The representative of New Zealand's Tax Service, John Nash, in an interview with Reuters said that his country "already has an active program to identify those involved in illegal offshore schemes and does not fulfill their obligations to the tax laws."

source: reuters.com