'Panama Papers' Leak

VanHalen · Apr 8, 2016

German paper won't publish all Panama data

By Frank Jordans - AP on April 7, 2016, 10:12 pm

The German newspaper that first obtained the so-called Panama Papers, a vast trove of documents on offshore companies, says it won't publish all the files, arguing that not all are of public interest.

Sueddeutsche Zeitung received the documents from an unidentified source more than a year ago and shared at least parts of them with dozens of other media outlets around the world.

Since the first reports were published on Sunday, prominent politicians, celebrities and businesspeople have had their offshore business dealings dragged into the spotlight, prompting a flurry of public outrage, official investigations and fierce denials from some of those named.

Sueddeutsche Zeitung said the complete set of 11.5 million documents "won't be made available to the public or to law enforcement agencies. That's because the SZ isn't the extended arm of prosecutors or the tax investigators."

Authorities have legal powers to obtain such documents from those suspected of wrongdoing, and in many cases there's no public interest in revealing companies' or individuals' offshore business dealings, the Munich-based paper said on Thursday.

The documents relate to Panamanian law firm Mossack Fonseca, which helps create shell companies for the world's rich and famous. The firm said it has filed a criminal complaint alleging that the data was stolen in a hacking attack.

Sueddeutsche Zeitung said it didn't know how the anonymous source obtained the data, but that he or she had expressed "a very strong moral impulse" and wanted to make "these crimes public".

Panama's government on Wednesday accused wealthy nations of unfairly attacking the Central American country while ignoring their own failings.

President Juan Carlos Varela said an international committee of experts would be created to recommend ways to boost transparency in the Central American country's offshore financial industry. Experts say that while offshore companies can be used for tax evasion and money laundering, there are also legitimate and legal grounds for creating them.

German MPs said on Thursday they plan to hold an urgent debate on the offshore leaks next week.

"The revelations in the Panama Papers have triggered a broad discussion among politicians and the public about necessary consequences," said Christine Lambrecht, an MP for the Social Democratic Party that is part of Chancellor Angela Merkel's governing coalition.

Responding to readers' queries about the absence of prominent German or American politicians in the reports, Sueddeutsche Zeitung said such names haven't yet been found in the documents.

It said the documents include copies of the passports of 200 Americans, and about 3500 shareholders in offshore companies listed addresses in the US.

"One possible reason why comparatively few Americans appear in the documents could be that US citizens have no reason to contact a law firm in Panama," the paper said.

"That's because offshore companies can easily be created in US states such as Wyoming, Delaware or Nevada."

VanHalen · Apr 8, 2016

Regulator to investigate Swiss banks’ connections to Panama Papers; 1MDB and Petrobras also in spotlight

PUBLISHED : Friday, 08 April, 2016, 1:05pm
UPDATED : Friday, 08 April, 2016, 1:05pm

Bloomberg

Switzerland’s financial regulator will investigate “suspicious” bank connections that have surfaced in “Panama Papers” leaks and is stepping up probes into the troubled Malaysian 1MDB fund and Petroleo Brasileiro SA.

“The leaked database from Panama is just the latest proof of how money flows like water through multiple jurisdictions, sometimes for legitimate purposes, sometimes not,” Financial Market Supervisory Authority (Finma) director Mark Branson said at a news conference in Bern on Thursday.

A series of reports this week based on millions of documents leaked from the Panama law firm Mossack Fonseca revealed how its lawyers, including a Geneva team, worked with Credit Suisse Group AG, UBS Group AG and other big banks to create numerous offshore shell companies for world leaders, athletes and other rich clients.

Finma will investigate the “suspicious” Swiss bank connections, Branson said, noting that this represents considerable work because of the sheer volume of information. The regulator had said on Monday it would “clarify” the extent to which Swiss banks may have used the services of Mossack Fonseca to determine if they broke any domestic banking rules.

Vast Sums

UBS said it ended its relationship with Mossack Fonseca in 2010. Credit Suisse Chief Executive Officer Tidjane Thiam said in an interview this week that his bank doesn’t engage in tax avoidance and only accepts offshore structures if they serve a legitimate purpose.

Two other international probes into alleged corruption have intensified in recent weeks. Finma is pursuing three enforcement cases against financial institutions in the Petrobras affair and four proceedings tied to allegations of bribery at 1Malaysia Development Bhd, Branson said.

“There is concrete evidence that the risk management and measures taken to fight money laundering were not sufficient,” Branson said. 1MDB directors offered to resign Thursday after a parliamentary committee probe found poor oversight of the fund.

Brazilian politicians are trying to impeach the country’s president Dilma Rousseff over allegations her campaign received illegal donations from a kickback scheme at state-run Petrobras. A quarter of Swiss banks questioned in connection with Petrobras may have violated rules to prevent money laundering, he said.

“The extent of the cases and the sums involved are vast,” in the Brazilian and Malaysian cases,” Branson said. “We are talking about cash flows amounting to several billion US dollars, with individual transactions running into hundreds of millions.”

VanHalen · Apr 8, 2016

Panama Papers: What next for Asia?

Karishma Vaswani Asia business correspondent
7 April 2016
Business

Tax has never been so sexy.

Chances are by now you know all the gory details - allegations in the Panama Papers that the super-rich and politically connected, and even some of their relatives, have moved hundreds of thousands of dollars from their own countries into offshore accounts in Panama, Hong Kong and Singapore, amongst other places.

A lot of the international spotlight has been centred on the practice of offshore banking.

Some of the biggest global offshore banking centres can be found in Asia - Singapore, Macao, Dubai and Hong Kong, for example, are amongst the top spots for the global super-rich looking to open an offshore account.

The practice in itself isn't illegal, but Asian capitals have been under pressure to share more information about who account holders are, and where the money comes from. So will the Panama Papers force more governments to become more transparent about tax?

There is often a thin line between tax avoidance and tax evasion. Getty Images

Unlikely, says Andy Xie, an independent economist based in China and Hong Kong.

"In Asia it's about how to hide your wealth that often hasn't been legitimately acquired," says Mr Xie. "Political power and ill-gotten wealth go hand in hand here.

"How are you going to convince people to close these doors?"

Evasion v. avoidance

Now let's be clear - setting up an offshore account or an offshore company is perfectly legal.

But here's where it gets complicated. There is a difference between tax evasion and tax avoidance. And the devil is in the details.

Tax evasion, according to Paul Lau, tax partner with professional services firm PricewaterhouseCoopers (PwC), is when "someone has income to report and then doesn't report it."

Singapore is one of a number of major financial centres in Asia. Getty Images

So if you have income in that offshore account, that you haven't declared to tax authorities back in your home country, and you are required to report that income to them - then that could be illegal.

But tax avoidance is something a bit more "nebulous", as Mr Lau puts it.

"Tax avoidance is taking advantage of certain tax provisions in a way that is not within the intent of the provision, to avoid paying tax."

So that means - if you've found a perfectly legal way to avoid paying taxes because of a provision in the tax system - well, then depending on the country, you may not be doing anything illegal at all.

Lots of hedges and provisos here, but that's sort of the point.

"The world is dotted with states and territories that make a speciality of providing services whose purpose is to facilitate ways to hide assets," says anti-corruption advocacy group Transparency International.

The so-called Panama Papers were leaked from law firm Mossack Fonseca. Getty Images

Activists say it is time for these countries to reform the secret world of finance they operate and become more transparent.

"The enablers - the accountants, the lawyers, the business formation people - they're all involved," says Transparency International's Casey Kelso.

"They are all getting a great deal of money as a percentage of these profits from these transactions."

'Serious view'

But reforming these offshore banking centres won't be easy. This sort of business attracts billions of dollars for offshore banking centres every year, and it's not just from individuals. Massive profit-making corporations often set up shop in these centres to pay less tax as well.

Google, Apple, Microsoft, BHP Billiton and Rio Tinto - they're all household names - and all have admitted to being under audit by Australian tax authorities for using Singapore as a marketing and service hub.

They report hundreds of millions of dollars of income in Singapore, but pay lower tax on their money there than they would back in Australia, because of Singapore's lower tax rates.

The companies say they're not doing anything wrong, because Singapore is an important hub for them. But Australia says if money was earned from business done in Australia, tax should be paid there.

People have long sent money overseas to try to limit the taxes they have to pay. Getty Images

Both Singapore and Hong Kong have said they take a serious view of tax evasion and support international efforts to tackle cross-border transgressions.

The government here has been quick to point out its efforts to clamp down on any illegal activities.

"Singapore takes a serious view on tax evasion and will not tolerate its business and financial centre being used to facilitate tax related crimes," the Monetary Authority of Singapore said in a statement.

Singapore's Ministry of Finance added: "We are reviewing the information being reported in connection with the so-called Panama Papers and are doing the necessary checks.

"If there is evidence of wrongdoing by any individual or entity in Singapore, we will not hesitate to take firm action."

In fact, many Asian countries have committed to exchange more tax information by 2018 as part of the Automatic Exchange of Information initiative set up by the OECD. Singapore, Japan, Hong Kong and Australia have all signed up.

So if you're an Australian and you open a bank account in Singapore, by 2018 in theory, your government could know about it.

But critics say there's no incentive for countries who depend on offshore banking to do this. In fact, their business depends on keeping things secret.

"The livelihoods of these offshore financial centres depend on giving their clients confidentiality," says Mr Xie. "Otherwise why would people hide their money there?"

In the end, it's all about who goes first. Countries want a level playing field, because if one offshore banking centre starts opening itself to greater scrutiny, there's a very good chance their wealthy customers will flee, running to the next most secret place to park their cash.

And as we all know, where there's demand, there will always be a ready supply.

VanHalen · Apr 8, 2016

Cameron offshore fund row: PM accused of 'hypocrisy'

1 hour ago
UK Politics

Labour has accused David Cameron of "hypocrisy" after he revealed he had owned shares in an offshore fund set up by his late father.

On Thursday, the PM said he sold the shares before he entered Number 10 in 2010 and had paid all UK taxes due on profits from the £30,000 sale.

He said the firm, Blairmore Holdings, had not been set up to avoid tax.

Labour's deputy leader Tom Watson said the PM had called people who invested in similar schemes "morally wrong".

Business Minister Nick Boles said "with the benefit of hindsight" it might have been better if the PM had revealed details of his shareholdings when the allegations first surfaced on Monday but he understood Mr Cameron's "natural human instinct to rally round his father".

The key point, he insisted, was that the prime minister had paid all the taxes expected of him.

'More answers'

There have been days of headlines about Blairmore Holdings - a fund for investors which until 2006 used "bearer shares" to protect its clients' privacy - following the leak of 11 million documents held by Panama-based law firm Mossack Fonseca.

They show that Mr Cameron's father, Ian, was one of five UK directors who flew to board meetings in the Bahamas or Switzerland.

Downing Street and Mr Cameron had issued four statements on whether Mr Cameron had any financial involvement with Blairmore Holdings before the PM told ITV News on Thursday about the shares he had owned.

Mr Watson said Mr Cameron could not be blamed for his father's actions but added: "He can for hypocrisy. He said that sunlight is the best disinfectant and wasn't entirely straight with the British people about what his own financial arrangements were.

"That wouldn't be so bad if he hadn't also been lecturing very prominent people about their own tax arrangements, some he called morally wrong for being invested in similar schemes."

What Cameron said when

Asked on Monday whether she could confirm that no family money was still invested in the fund, Mr Cameron's spokeswoman said: "That is a private matter"
Then in an interview on Tuesday, Mr Cameron said: " I have no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description"
Downing Street issued a statement later that day: "To be clear, the prime minister, his wife and their children do not benefit from any offshore funds. The prime minister owns no shares. As has been previously reported, Mrs Cameron owns a small number of shares connected to her father's land, which she declares on her tax return"
No 10 then released a further clarifying statement on Wednesday, saying: "There are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in future"
On Thursday the PM told ITV News: "We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010"

Shadow Work and Pensions Secretary Owen Smith said there were now "doubts about the prime minister's trustworthiness", accusing him of "speaking out of both sides of his mouth" in recent days and calling on him to publish details of all his past investments.

And SNP leader Nicola Sturgeon said the prime minister had "big questions to answer", adding that tax avoidance regulations need "root and branch reform".

Ian Cameron was a director of Blairmore Holdings. Getty Images

But James Quarmby, a specialist in tax planning and wealth structuring at law firm Stephenson Harwood, told BBC Radio 4's Today programme there was a "massive misunderstanding" about what Mr Cameron had invested in.

He said it was a hedge fund that was "about as boring as it gets for investments", adding that it would not be used for avoiding tax.

"It's no different from Mr Cameron investing in a UK stock," he said.

And Conservative MPs rallied round the prime minister. Foreign Secretary Philip Hammond said he had "acted quite properly" while Mark Pritchard said the focus on his family was "very distasteful".

Mr Boles told BBC Breakfast that tax evasion was a "terrible thing" but no-one was suggesting the prime minister had not made all of the payments "he was required to make under UK law or that he has in any way used any of this to try to avoid tax".

"People have to pay tax," he said. "They have to pay tax on all income, from their work or from investments and I don't care where that investment is... that is what matters, that people pay the tax that is due. The prime minister has done so."

Analysis by deputy political editor James Landale

When a politician is under pressure, facing questions about their family and their finances, their natural instinct is to protect their privacy and say as little as possible. But when that pressure gets too great, there comes a moment when they have to go public and for David Cameron that moment came this evening/ last night.

In the long run, the prime minister will hope to achieve his aim of drawing a line under this story. Journalists and opposition MPs will naturally keep asking questions.

But there are unlikely to be more significant revelations than the fact that Mr Cameron did indeed benefit from an offshore trust, something that is legal but over which people have differing views. The problem for the prime minister is that the political imagery is not good. He is engaged in the political fight of his life, trying to convince the British people to vote to stay in the European Union.

And anything like this that distances Mr Cameron from the electorate, that reminds people of his wealthy and privileged background, well let's just say the timing is not great

Asked why it had taken four days for the prime minister to disclose the information, Mr Boles told Radio 4's Today he understood why Mr Cameron had not wanted to "intrude on his father's memory" at the start of the week and "feed" speculation about his business activities.

"I am sure with the benefit of hindsight he would rather all of what has come out over the last four days had come out on the first day.

"The instinct is one that we can all identify with even if it is something he might have done differently if given a second chance."

'Nothing to hide'

In his interview on Thursday, Mr Cameron told ITV News: "I don't have anything to hide. I'm proud of my dad and what he did and the business he established... I can't bear to see his name being dragged through the m&d."

Mr Cameron said much criticism was based on a "fundamental misconception" that Blairmore was set up to avoid tax.

"It wasn't. It was set up after exchange controls went, so that people who wanted to invest in dollar denominated shares and companies could do so, and there are many other, thousands of other unit trusts set up in this way," he said.

Downing Street said Mr and Mrs Cameron bought their holding in April 1997 for £12,497 and sold it in January 2010 for £31,500.

That year the personal allowance before capital gains tax was paid was £10,100 per person.

What are the Panama Papers?

A leak of 11.5 million documents has lifted the lid on how the rich and powerful use tax havens to hide their wealth.

The files were leaked from one of the world's most secretive companies, a Panamanian law firm called Mossack Fonseca.

Among the files are details about:

The late father of UK Prime Minister David Cameron
The brother-in-law of China's President Xi Jinping
Ukraine President Petro Poroshenko, and Argentina's President Mauricio Macri
Three of the four children of Pakistan's Prime Minister Nawaz Sharif
The documents show that Iceland's Prime Minister, Sigmundur Gunnlaugsson, had an undeclared interest linked to his wife's wealth. He has now resigned

The scandal also touches football's world governing body, Fifa.

Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing.

VanHalen · Apr 8, 2016

http://www.bbc.com/news/world-latin-america-35991155

Panama Papers: Argentina President Macri to go before judge

3 hours ago
Latin America & Caribbean

Argentine President Mauricio Macri has pledged to assert his innocence when he appears before a federal prosecutor on Friday to explain his finances.

An investigation began on Thursday after it transpired Mr Macri was mentioned in the Panama Papers, leaked files of law firm Mossack Fonseca.

Mr Macri said he would file a judicial "declaration of certainty" so the court can see he is telling the truth.

In a televised address, he vowed to prove he had done nothing wrong.

According to local media reports, the president was listed as director of an offshore company in the Bahamas.

He said he wanted to co-operate fully with any inquiry.

"I know there are some people concerned about these allegations in the Panama Papers that have come out and involve me," he said.

"I want to say one more time that I am very calm, I have complied with the law, I have told the truth and I have nothing to hide."

Protest have been held in Buenos Aires calling for the president to resign. AP

President Macri - a US-educated businessman - has made it a priority to mend relations with foreign powers. Reuters

Mr Macri said that he had made clear in his initial declaration that he did not have any shares and did not receive any payment for acting as a director of offshore companies.

His office has insisted that he had no shares in the company in question and never received any income from it.

Argentina's national tax authority and anti-corruption office will be asked to provide information to the inquiry.

Prosecutor Federico Delgado said he wanted to determine if Mr Macri had "omitted, with malicious intent" mentioning his reported role in the Bahamas-registered offshore company Fleg Trading.

La Nacion, one of the newspapers examining some of the leaked documents, reported that Mr Macri was listed as a director of Fleg Trading from 1998 until 2009.

Mr Macri did not list the company in his 2007 financial declaration, when he became mayor of Buenos Aires, or in his 2015 declaration when he became president.

On Tuesday, Mr Macri's office confirmed that a business group owned by the president's family had set up an offshore company through the law firm at the centre of the Panama Papers scandal.

But his office argued that because he had never received any income from it there had been no reason to mention it in the financial declarations.

Mr Macri campaigned on a promise to combat corruption.

Leaks continue to make waves

Meanwhile, Panama's vice-president and foreign minister, Isabel De Saint Malo, has defended her country, saying it had been unfairly singled out.

Speaking to the BBC, she said: "This publication has information on many jurisdictions, over twenty-one jurisdictions where banks are based - and not one bank is based in Panama...So this has made Panama in a wrong and bad way the focus of attention in the world."

Elsewhere:

UK Prime Minister David Cameron is accused of "hypocrisy" by the opposition Labour Party after he said he had owned shares in an offshore fund set up by his late father
Thailand's Anti-Money Laundering Office says it is investigating 16 people, including current and former politicians and well-known business people, whose names appeared in the papers
Russian President Vladimir Putin denies having any links to offshore accounts, despite not being named directly in the papers, and claimed the leak was part of a US-led plot to weaken Russia
A number of Congo-Brazzaville officials close to the country's president, Denis Sassou Nguesso, are linked to offshore firms trading in Congolese oil, France's Le Monde reports

VanHalen · Apr 8, 2016

‘I have nothing to hide’: son of late Chinese leader Hu Yaobang named in leaked ‘Panama Papers’ admits having offshore company

PUBLISHED : Friday, 08 April, 2016, 4:09pm
UPDATED : Friday, 08 April, 2016, 4:13pm

Nectar Gan
[email protected]

The son of China’s late liberal leader Hu Yaobang is the first relative of the nation’s political elite named in the leaked “Panama Papers” documents to admit to having an offshore company.

Son of reformer Hu Yaobang rues lost chance for change, 25 years after his father’s death

Hu Dehua, the businessman son of the former Communist Party chief who was ousted in 1987 because of his liberal thinking, told the South China Morning Post on Friday that he had nothing to hide.

“When asked by the media, of course I should respond,” he said. “I think this is very straightforward and there is nothing to hide.”

[Hu Dehua says he set up the offshore company in 2013. File photo: Simon Song]

He confirmed to Hong Kong-based Cable TV and newspaper Ming Pao on Thursday that he had registered the British Virgin Island entity, Fortalent International Holdings.

The use of offshore companies is a sensitive issue on the mainland because close relatives of Chinese leaders are implicated, and news of the leaked documents has been subject to blanket censorship there, both on the internet and in state media.

Family members of at least eight current and former Chinese top-ranking officials have been named in the Panama Papers as being the owners or shareholders of secretive offshore companies, including the brother-in-law of President Xi Jinping, the daughter of former premier Li Peng, as well as the daughter-in-law of current propaganda chief Liu Yunshan and the son-in-law of current vice-premier Zhang Gaoli.

Hong Kong was busiest office of Panama Papers law firm

However, Hu is the first and only relative of China’s political elite to comment on the issue so far.

“The registration was all above board using my own passport under my real name,” he said.

Hu told the Post he did not know why others had chosen not to respond.

“This is my style of doing things – a habit I’ve formed over all these the years,” he said. “But I can’t demand everyone to be like me,” he said.

China's elite hiding billions overseas, US report says

The registering of offshore companies was “a right of Chinese citizens”, he said. “There is really no need to be secretive about it.”

[Hu Dehua, the son of Hu Yaobang, poses for a photograph in 2014. File photo: Simon Song]

Hu said his offshore company had been set up in 2003 to help his mainland-based company, Beijing Talent Technology Development, to go public in Hong Kong.

The listing attempt had failed, but he kept the offshore company, which had no capital or business operations over the years.

Chinese law does not ban its citizens from setting up offshore entities, and the leaked documents do not show evidence of any wrongdoing or illegal activities.

However, the disclosure does shed light on the wealth of the current and former leaders’ families.

Hu is a former teacher of communication technologies and a researcher in software engineering , and did not set up his own company until 1994, five years after his father died.

VanHalen · Apr 8, 2016

Philippines to probe ‘secret’ Marcos offshore trust after leaks expose rich who hide cash

PUBLISHED : Thursday, 04 April, 2013, 5:29pm
UPDATED : Tuesday, 05 April, 2016, 3:01pm

AFP

The Philippine government said on Thursday it planned to investigate an allegation that the eldest daughter of late dictator Ferdinand Marcos was the beneficiary of a secret offshore trust.

A report published by the Philippine Centre for Investigative Journalism alleged Imee Marcos, 57, now a provincial governor, had failed to declare the British Virgin Islands trust as legally required.

The revelation was part of a collaborative leak by the International Consortium of Investigative Journalists (ICIJ) who began releasing the details of prominent public figures with offshore investments. The group claims it has more than 2m e-mails and other documents exposing the identities of the world's wealthy and elite who are secretly stashing their money.

Andres Bautista, head of a presidential body tasked to recover the billions of dollars the Marcos family stole from government coffers during the patriarch’s 20-year rule, told reporters his office would look into the allegations.

“We are duty bound to investigate and, depending upon informed preliminary findings, decide whether to pursue the matter,” Bautista said.

A popular uprising topped Marcos in 1986, and he died in US exile three years later. His famously extravagant wife, Imelda, has always denied she and her husband were corrupt.

The Presidential Commission on Good Government, which Bautista heads, has recovered US$4 billion in assets that the Marcos illegally acquired, including from Swiss bank accounts and US properties.

But Bautista said in January that, with Imee, Imelda and Ferdinand Junior having re-established political influence in the Philippines, the commission was considering giving up on the chase for the billions more believed to be hidden.

“It’s been 26 years and people you are after are back in power. At some point, you just have to say, ‘We’ve done our best’, and that’s that. It is really difficult,” he said.

The Philippine Centre for Investigative Journalism said the work looking into the Marcos trust was a collaboration with the International Consortium of Investigative Journalists, which includes major foreign media groups.

It said the research had uncovered “scores of documents” showing Imee Marcos was a financial advisor for, and beneficiary of the secret trust, although it was not known what assets it held.

Calls by AFP to Imee Marcos’s office went unanswered on Thursday. The PCIJ said she had failed to respond to its requests for comment.

Imee Marcos is running unopposed in next month’s mid-term elections for a second term as governor of Ilocos Norte province, which was her father’s political stronghold.

Imelda Marcos is likely to retain her seat in Congress representing a district in the province. Ferdinand Junior, a senator, is widely expected to run for president in 2016.

VanHalen · Apr 9, 2016

Symphony of scandal: The significance of the ICIJ leaks timing

http://www.scmp.com/infographics/article/1412376/symphony-scandal-significance-icij-leaks-timing

VanHalen · Apr 9, 2016

German journalists 'surprised' by impact of Panama Papers

AFP on April 9, 2016, 6:56 am

Munich (Germany) (AFP) - The two German journalists of the Sueddeutsche Zeitung daily behind the Panama Papers revelations say they are surprised by the global shockwaves the leak caused and promised more sensational disclosures.

"I never imagined there would be such a reaction, that it would be on every television channel and that we would receive media requests from all around the world," one of the reporters, Bastian Obermayer, 38, told AFP.

Germany's second-biggest daily in sales, the Sueddeutsche received from an anonymous source more than 11 million documents of the Panamanian law firm Mossack Fonseca that cast a harsh spotlight on the shady financial dealings of many of the world's rich and powerful.

The liberal daily shared the massive leak with a consortium of hundreds of international investigative journalists who have mined the mountains of data for more than a year.

Since Sunday, the revelations have brought down Iceland's prime minister Sigmundur David Gunnlaugsson, forced the resignation of a senior UEFA official and raised the heat on British Prime Minister David Cameron and Argentine President Mauricio Macri.

"We are still in the middle of the revelations," said the other journalist, who has a confusingly similar surname, Frederik Obermaier, 32, speaking at the newspaper's headquarters in Munich.

"In the coming days, there will be more topics that will make big headlines in many countries."

- 'Destroy the system' -

In the mass leak, "we are seeing the most different types crimes, we see how the drug cartels launder money, that arms merchants are implicated, that sanctions are being circumvented, we are seeing tax fraud," said Obermayer.

"If politicians really want to stop it, they must act now."

"We really need a hammer to destroy the system of offshore companies," he added, arguing that "the policy of small steps is not enough".

The data showed that, as national governments take steps against tax cheats, "they adapt, they find new ideas" to divert and hide their money, he said.

His colleague, Frederik Obermaier, was more reserved: "I think there is a lot of talk, but what will be done in the end is a different thing."

The reporters said they don't know the name of the source at the origin of the scoop, and that they received the data on offshore companies "more than one year ago".

"I do not know if it's a man or a woman, or a group. I don't know the identity of this person," said Obermaier, adding however that "we have become a bit more familiar over the year" with the leaker.

At pains to protect their source, the journalists also declined to reveal whether the person had been in contact again or had reacted to the international reverberations.

But they were clear on the source's "moral" motivation, that the person "wants these crimes to be made public".

"Our source has obviously seen a lot of this data and thought it had to be published," said Obermaier, while his colleague stressed that the source "wants Mossack Fonseca to cease operations".

- 'Future of journalism' -

It was Bastian Obermayer who received the first contact from the anonymous source, offering the explosive information.

On the choice of Sueddeutsche, "we can only speculate on the reasons why we were contacted", he said.

Founded in Munich after World War II, the broadsheet is considered one of Germany's major newspapers of record, along with the conservative Frankfurter Allgemeine Zeitung, and is number two in sales after tabloid-style Bild.

Having initially reacted in a "sceptical" way, Obermayer said he soon realised, together with his colleague, that the initial documents received were genuine.

Later they decided to share the treasure trove of data in a massive research project with journalists from around the world.

"The future of journalism lies in international cooperation," Obermayer said.

"We are always stronger together."

VanHalen · Apr 9, 2016

UK PM under pressure over offshore fund

AAP on April 9, 2016, 4:07 am

British Prime Minister David Cameron misled the public and "lost the trust of the British people" after admitting he benefited from an offshore fund set up by his late father, Opposition Leader Jeremy Corbyn says.

The Labour leader said on Friday the prime minister should make a statement to parliament and give a "full account of all his private financial dealings" as he claimed the revelations raised issues about his personal integrity.

Cameron sold his and his wife Samantha's shares in Blairmore Holdings - one of the tax haven schemes exposed in the Panama Papers leaks - in 2010 and insisted it was not set up as a tax dodge.

He paid income tax on dividends but the STG19,000 ($A35,519) profit on the sale was insufficient to attract capital gains tax.

In a strongly-worded statement, Corbyn demanded "decisive action" against tax dodging which the Panama Papers leak revealed was taking place on an "industrial scale".

Cameron has insisted it was a "fundamental misconception" that Bahamas-based Blairmore was set up by his father Ian to avoid paying UK tax and stressed that his interest in it had been "subject to all the UK taxes in the normal ways".

Pressure has been mounting on the prime minister for days after Downing Street initially claimed his financial affairs were a "private matter".

Corbyn said: "It is now clear that the prime minister has misled the public about his personal involvement in offshore tax avoidance schemes.

"It took five weasel-worded statements in five days for the prime minister to admit that he has personally profited from an undeclared Caribbean tax haven investment deal.

"After years of calling for tax transparency and attacking complex offshore tax arrangements as 'morally wrong', the prime minister has been shown to have personally benefited from exactly such a secretive offshore investment.

"His determination to conceal that arrangement over many years raises serious questions over public trust in his office and his willingness to be straight with the public."

Corbyn added that "the revelations of industrial scale tax dodging and corruption from Panama haven't just raised issues about the prime minister's personal integrity" but "also highlight his government's failure to take decisive action to crack down on tax avoidance and evasion".

Corbyn said Cameron had "lost the trust of the British people".

The prime minister could face a sleaze investigation over claims he should have declared his shares in Blairmore in the register of members' interests.

VanHalen · Apr 10, 2016

VanHalen · Apr 10, 2016

Panamanian law firm’s man in Hong Kong

About a third of Mossack Fonseca’s business was conducted on mainland, and the bulk of the work passed through the office run by Zhang Xiaodong

PUBLISHED : Sunday, 10 April, 2016, 12:46am
UPDATED : Sunday, 10 April, 2016, 1:16am

Stuart Lau

On the face of it, Zhang Xiaodong appeared to be a professional artist when he opened his photo exhibition, Obsessed in Havana, at a university in Xian last month.

Only his overly formal business suit might have offered a clue about his status as the businessman in charge of the pivotal Hong Kong operation of Mossack Fonseca, a Panamanian law firm that was to become the centre of an international tax-avoidance scandal implicating political leaders, wealthy businessmen and celebrities around the world.

Zhang *– who is better known by his adopted Cantonese name, Austin Cheung – has for two decades been a core member of the company’s business in Hong Kong and on the mainland.

The firm is accused of helping relatives of past and present Chinese leaders set up offshore companies in an alleged bid to avoid paying taxes.

About a third of the Panama firm’s business was conducted on the mainland, with the bulk passing through the Hong Kong office, according to the BBC, which is part of the consortium of investigative journalists examining the Panama Papers.

Zhang joined the firm initially in its Panama City head office, staying there for a few years. His name first appeared on the Hong Kong branch’s list of directors in 1995, two years after it was set up. He moved to Hong Kong in 1997 and, in 2002, the office was rebranded as the Asia headquarters, of which he was president, Companies Registry records show.

One of his main targets then, according to Mossack Fonseca’s website, was to tap the increasingly outward-looking mainland market.

“Chinese offshore businesses are more likely to go to the Cayman Islands and Bermuda – for the purpose of stock market listings – as well as the likes of Seychelles and Mauritius,” Zhang wrote in 2009.

In an interview with China Economic Weekly in 2007, he suggested mainland companies set up offshore accounts amid “overseas countries’ hostility to the rising Chinese economic power”.

Zhang did not respond to *repeated requests from the Sunday Morning Post for an interview. A receptionist at the Tsim Sha Tsui office, located in a modest Harbour City unit, said “the boss” was not there.

The latest official records showed Auckland in New Zealand as his address, while his WeChat account stated he lived in Southern district, Hong Kong.

Zhang’s personal life is no less interesting than the company he joined 20 years ago. In 2004, Zhang started his PhD studies on private international law at Wuhan University, according to his LinkedIn account. It took him nine years to graduate.

“It is highly unusual” for a PhD to be completed in such a long time, said Xu Yan, a Chinese University law academic who did her undergraduate degree at Wuhan University. Xu added that most PhD candidates complete the *degree within three years.

Zhang turned high-profile in 2006 when he founded the China Academy of Wealth Planning and Management, which took the work of Mossack Fonseca to the level of international academic *research. Its website was taken down several days ago.

Two Hongkongers were also with the academy, including University of Hong Kong tax law academic Lusina Ho and accountant Ronnie Choi Kwok-wai.

Choi refused to comment on Zhang’s business, citing ongoing investigations, but added: “He likes taking pictures a lot.”.

Zhang likes it so much he set up the China Photographic Publishing House in June.

Among the photo albums on his blog, one contained snapshots of Panama. The caption: “Heaven, an alias for Panama.”

VanHalen · Apr 12, 2016

British PM Cameron battles back from stinging criticism over Panama Papers

PUBLISHED : Tuesday, 12 April, 2016, 1:01am
UPDATED : Tuesday, 12 April, 2016, 1:02am

Associated Press

British Prime Minister David Cameron fought back Monday after days of criticism over his finances, lashing out at what he called hurtful and untrue claims about his late father’s investments sparked by leaked details about the offshore accounts of the rich and famous in the Panama Papers.

Trying to restore his government’s shaken reputation, Cameron insisted that “aspiration and wealth creation are not somehow dirty words” and said Britain was acting to stop evasion in its overseas tax havens.

Cameron has been under mounting pressure since his father, Ian Cameron, was identified as a client of a Panamanian law firm that specialises in helping the wealthy reduce their tax burdens. The prime minister initially refused to say whether he had a stake in Blairmore Holdings, an offshore firm established by his father, before acknowledging he had sold his shares in it shortly before he was elected in 2010.

“I accept all of the criticisms for not responding more quickly to these issues last week,” Cameron told lawmakers in the House of Commons. “But as I said, I was angry about the way my father’s memory was being traduced.”

Cameron said his father had set up an investment fund overseas so it could trade in dollar securities — “an entirely standard practise and it is not to avoid tax.” He said millions of Britons had investments in such funds through their workplace pensions.

Cameron said “there have been some deeply hurtful and profoundly untrue allegations made against my father,” who died in 2010.

Revelations about the Cameron family finances — found among more than 11 million documents from the Panamanian law firm Mossack Fonseca — have overshadowed the government’s claim that it is committed to closing tax loopholes.

Cameron has championed greater financial transparency, and is due to host an international anti-corruption summit in London next month.

A law requiring British companies to disclose who really benefits from their ownership comes into force in June. Cameron said Monday that Britain’s Crown dependencies and overseas territories — including such tax havens as Jersey and the British Virgin Islands — had also agreed to share beneficial ownership information with UK law-enforcement bodies.

The prime minister, a former PR man with a reputation for sharp political intuition, appeared to be caught off-guard by the tax furore. His office initially insisted that his financial arrangements were private, before acknowledging that Cameron and his wife had sold some 30,000 pounds ($44,000) in shares in the offshore fund shortly before he became prime minister in 2010, to avoid any potential conflict of interest.

Finally, on Sunday Cameron published a summary of his tax returns since 2009, becoming the first British leader to do so. The records appear to show that Cameron paid his full share of tax — 75,898 pounds on taxable income of 200,307 pounds in the most recent tax year.

But the document also generated a new round of headlines over a 200,000 pound gift from his mother on which Cameron — legally — paid no tax.

Cameron said publishing his tax information had been “unprecedented.” He said others who aspired to be prime minister or control the country’s finances should follow suit. But he said extending compulsory tax disclosure to all lawmakers would be “a very big step,” and one he did not recommend.

Treasury chief George Osborne and opposition leader Jeremy Corbyn both published details of their own tax returns Monday. So did London Mayor Boris Johnson, revealed to have paid almost 1 million pounds in tax over the last four years.

The tax spat could have repercussions for Britain’s June 23 referendum on European Union membership. Cameron is the leading proponent staying in the EU, and anything that tarnishes his brand could undermine that campaign.

In Britain, the Panama Papers sparked a furore shot through with the national obsessions of privilege and class.

Conservative lawmaker Alan Duncan accused the prime minister’s critics of hating “anyone who’s even got a hint of wealth in their life.”

But Labour leader Corbyn said the Panama Papers had “driven home is what many people have increasingly felt — there is now one rule for the super-rich and another for the rest.”

“I’m honestly not sure that you fully appreciate the anger that is out there over this injustice,” he told Cameron.

VanHalen · Apr 12, 2016

Hard disk gave investigators data to expose tax havens, account holders

Investigating journalists used hi-tech software to scour 260 gigabytes of secret information to expose the real owners of accounts

PUBLISHED : Friday, 05 April, 2013, 12:00am
UPDATED : Tuesday, 05 April, 2016, 3:01pm

GDN

An investigation into an offshore tax haven that is exposing secret accounts held by the wealthy around the world began when a computer hard drive packed with corporate data arrived in the post at the International Consortium of Investigative Journalists (ICIJ).

Its director, Gerard Ryle, obtained the small black box as a result of his three-year investigation of Australia's Firepower scandal, a case involving offshore havens and corporate fraud.

The hard drive contained more than 260 gigabytes, the equivalent of half a million books. Its files included 2 million e-mails, four large databases, details of more than 122,000 offshore companies or trusts, and nearly 12,000 intermediaries.

Unlike the smaller cache of US cables and war logs passed in 2010 to WikiLeaks, the offshore data was not structured or clean, but an unsorted collation of internal memos and instructions, official documents, e-mails, large and small databases and spreadsheets, scanned passports and accounting ledgers.

Analysing the immense quantity of information required "free-text-retrieval" software, which can work with huge volumes of unsorted data. Such high-end systems have been sold for more than a decade to intelligence agencies, law firms and commercial corporations. Journalism is just catching up.

The named people who administered offshore companies included shareholders, directors, secretaries, lawyers, accountants, nominees and trustees. But many of such structures were simply legal devices designed to conceal. The real beneficial owners proved often to be the so-called "settlors" or "protectors" of offshore trusts, and those holding legal powers of attorney that enable them to exert secret control over the bank accounts.

China, Hong Kong, Taiwan, the Russian Federation and former Soviet republics appeared to provide the majority of secret offshore owners. The British Virgin Islands are the second-largest source of capital investment in China - on paper at least. Cyprus, an offshore island currently in financial crisis as a result, is also identified in the data as a huge source of Russian investment.

The ICIJ's collaborating journalists from 46 countries constituted one of the largest groups ever to have worked together on a data project.

Interestingly, the team's attempts to use encrypted e-mail systems such as PGP ("Pretty Good Privacy") were abandoned because of complexity and unreliability that slowed them.

Meanwhile, computer programmers in Germany, Britain and Costa Rica also designed sophisticated data-mining and cleaning software for the ICIJ. Manual analysis in New Zealand proved crucial in early decisions on what countries the ICIJ needed reporters.

The ICIJ's own search system - named Interdata - was developed by a British programmer as dozens of new journalists joined the expanding project. Interdata allowed them to download copies of those of the 2.5 million offshore documents relevant to their countries.

The ICIJ rebuilt some of the databases in an effort to run them in their original format. There were surprises. The databases were formatted to record who really lay behind each entity, as required by international rules on money laundering and "due diligence". Journalists hoped the truth was just a click away.

In fact, entries for "beneficial owners" were often empty. The offshore agencies had frequently passed off their supposed legal responsibility to intermediaries in other countries. The lesson was that the empty fields were not an accident; it was the design. Only occasionally would screen give contact details for those who really owned the assets.

Persistence with leads yielded some great rewards: not just occasional and unexpected top names, but also the inside details of many nuanced and complex schemes for hiding wealth.

More than 175,000 British-registered companies have used directors giving addresses in offshore jurisdictions. More than 60,000 of those firms are listed as currently active on the official register of British businesses.

Having directors in offshore jurisdictions does not indicate anything illegal, or that a director is a sham. But the figures reveal the huge scale of company registration relative to some of the islands' tiny populations: 47,161 companies have listed directors from the Isle of Man - representing one British company for every 1.8 residents of the island.

___________________________________________________________

Some of the British Virgin Islands investors fingered

The president of oil-rich Azerbaijan, Ilham Aliyev, heads the list of names of owners of secret offshore companies in the British Virgin Islands to have emerged so far. Also on the list are prominent figures in Pakistan, India, Thailand and Indonesia. Here are some of them:

President Ilham Aliyev Three BVI entities set up in 2008 in the names of the Azerbaijani president's daughters Arzu and Leyla. Another BVI entity set up in 2003 lists the president and his wife Mehriban as owners.

Bidzina Ivanishvili The billionaire businessman became prime minister of Georgia last year. Listed from 2006-9 as director of the BVI company Bosherston Overseas Corp, administered via an agent in Panama, incorporated in 2006 and still active. His spokesman said he has done everything according to law.

Bayartsogt Sangajav One of Mongolia's most senior politicians is linked to Legend Plus Capital. He said he is considering resigning from office after being confronted with evidence of the offshore entity and a secret Swiss bank account. He was his country's finance minister from September 2008 until a cabinet reshuffle in August last year. He is now the deputy speaker of Parliament.

Maria Imelda Marcos Manotoc Late Philippine president Marcos' eldest daughter, a provincial governor, is listed in 2005 in the BVI as the "investment advisor" and beneficiary of the Sintra Trust, set up by her associate, Mark Chua of Singapore. She does not mention the trust in her declaration of financial interests.

Stephen Riady The Riady family, one of many wealthy Indonesian families and owners of the Lippo Group, had at least 11 offshore entities. The agents, TrustNet, noted "client does not want to be seen dealing offshore". A spokeswoman for Stephen Riady said there was "nothing illegal or improper in protecting the privacy of one's own information".

Nalinee "Joy" Taveesin Thailand's international trade representative, and previously a government minister and adviser to the commerce minister. The offshore company naming her and her brother Anuraj Mishra was set up 2008, according to TrustNet records. In the same year, the US treasury department blacklisted her and her assets as a "crony" of the Zimbabwean leader, Robert Mugabe.

Gaddam Vivekanand A Congress party MP, Vivekanand is also vice-chairman of Visaka Industries, which produces about one quarter of India's asbestos supplies. He and his wife, Saroja, are listed as directors and shareholders of Belrose, incorporated in the BVI on September 2008. Vivekanand said: "I do not remember being involved with such a company.''

The Guardian

VanHalen · Apr 12, 2016

Taxing question of why China exports goods via Hong Kong

PUBLISHED : Saturday, 09 April, 2016, 11:59pm
UPDATED : Sunday, 10 April, 2016, 12:06am

Jake Van Der Kamp
[email protected]

Here is a teaser for you. Why should people in China want to export goods abroad by first shipping them to Hong Kong and then shipping them on unchanged as re-exports to their final destination? Why not go direct?

Elsewhere this sort of thing is occasionally done because of anomalies of trade treaties, but this is not the case here. Nor does it happen because we have the only worthwhile sea port around. We don’t.

The reason lies in the precise definition of the word “unchanged”. The goods are unchanged, but the accompanying paperwork is not. Along the way an extra margin of about 19 per cent is added to the prices of these goods.

This allows the exporter to escape profits tax in the mainland. No profits were made there. Conditions just now are so tight, you see. It also allows the exporter to escape profits tax in Hong Kong. No work was done on the goods. The paperwork doesn’t count.

We are talking here of tax avoidance on income of HK$570 billion a year. That’s billion, not million, and that’s per year and still growing as the first chart shows. Move aside, Panama, you ain’t seen nuttin’.

Here is another question for you. Would you believe me if I told you that the second chart is a track of me doing push-ups on a mirror?

OK, OK, but something is obviously happening on a mirror here and it happens to be the two sides of our capital flows. The line on top shows you how much foreigners invest in Hong Kong every year in total and the bottom line shows you how much we invest abroad every year.

Look at the scale markers on the left. On three occasions over the last eight years foreigners invested more than HK$2 trillion a year here, which is greater than the size of our entire economy, and on exactly these same three occasions we invested exactly as much abroad. Coincidence?

The reporting rules say this is supposed to be real investment in Hong Kong and real investment abroad but, in fact, it is money just passing through, trillions, plural, per year.

Why anyone should then bother passing it further through Panama is a mystery to me. We already wash it whiter than any Panama law office could wash it.

It is no mystery to me, however, that our courts have sentenced a number of people to long prison terms for money laundering after they were caught with larger sums of cash than they could have earned from their stated line of work.

My guess is that most were only keeping the wheels of cross-border commerce turning by facilitating payments on which Beijing still officially frowns.

But the point is that when judges who know next to nothing about these things invoke bad law to come down hard on people who don’t really matter, not really anyway, we can make Washington and Brussels think that we’re tough on money laundering.

Hong Kong, tough on money laundering.

Ha-ha-ha-ha.

Ho-ho-ho-ho.

Hee-hee-hee-hee.

VanHalen · Apr 12, 2016

Panama Papers law firm secretly used name of Red Cross to help hide money

PUBLISHED : Monday, 11 April, 2016, 3:28pm
UPDATED : Monday, 11 April, 2016, 3:28pm

Associated Press

The law firm at the centre of the Panama Papers offshore accounts scandal routinely usurped the name of the Red Cross and other charities to help obscure the origin of millions of dollars in questionable funds, two newspapers involved in the investigation reported Sunday.

There’s no suggestion that the charitable groups had any idea their name was being used in this way. International Committee of the Red Cross spokeswoman Claire Kaplun said that the revelation was “a total surprise and something we find extremely shocking.”

France’s Le Monde and Switzerland’s Le Matin Dimanche said Mossack Fonseca created dummy foundations with high-minded names such as the “Faith Foundation” to hold shares in around 500 offshore companies. The foundation’s beneficiary was routinely listed as “the Red Cross”, a designation which served the dual purposes of hiding the firms’ real beneficiaries and of draping them in an “NGO aura,” the papers wrote.

Mossack Fonseca didn’t immediately return an email seeking comment, but a leaked email cited by the publications appeared to lay out the firm’s reasoning.

China's elite hiding billions overseas, US report says

“Given that banks and financial institutions are today asked to obtain information about economic beneficiaries, it has become difficult for us not to divulge the identity of those of the Faith Foundation’s,” the email said, according to the papers. “That’s why we’ve implemented this structure designating the ‘International Red Cross.’ It’s easier that way.”

Another email cited by the papers suggests Mossack Fonseca deliberately kept the Red Cross in the dark about the manoeuvre.

“According to Panama law, the beneficiaries of a foundation can be used without knowing it,” the email said, according to the papers. “That means the International Red Cross doesn’t know about this arrangement.”

Hong Kong's rich face exposure in tax-haven leak

Kaplun, the Red Cross spokeswoman, said that using the group’s name or logo without its permission is barred by international law — and could put the group’s staff in jeopardy.

“We work in conflict zones. We work without weapons. Our protection is our name, our emblem, the faith that people have in our reputation,” she said.

“Let’s say this money was linked to a warring party in a conflict. Imagine what consequences that could have.”

The newspapers’ examination of the Faith Foundation turned up a host of questionable connections.

Journalism group ICIJ snubs requests for access to bank account data

Both said that the Faith Foundation was a relay in the money trail leading back to former Argentine President Nestor Kirchner and his wife, Cristina Fernandez de Kirchner, who succeeded him in 2007. The foundation also played a role in a complex London real estate transaction involving Emirati leader Sheikh Khalifa bin Zayed Al Nahyan, the papers said, adding that another Panama-based foundation played a similar role in obscuring the finances of Elena Baturina, the wife of Moscow’s ex-mayor and repeatedly listed as Russia’s wealthiest woman.

VanHalen · Apr 13, 2016

CIA middlemen and other spies used Panama Papers law firm to hide activities, report says

PUBLISHED : Tuesday, 12 April, 2016, 1:49pm
UPDATED : Tuesday, 12 April, 2016, 1:49pm

Agence France-Presse

Secret agents from several countries, including intermediaries of the CIA, have used the services of Panamanian law firm Mossack Fonseca in order to “conceal” their activities, German newspaper Sueddeutsche Zeitung reported Tuesday.

“Secret agents and their informants have made wide use of the company’s services,” wrote the newspaper, which obtained a massive stash of 11.5 million documents from the company that is sending shockwaves around the globe.

“Agents have opened shell companies to conceal their activities... Among them are close intermediaries of the CIA,” the newspaper reported.

The Munich-based newspaper said Mossack Fonseca’s clients included “several players” in the 1980s Iran-Contra scandal, which saw senior US officials facilitate secret arms sales to Iran in a bid to secure the release of American hostages and fund Nicaragua’s Contra rebels.

The Panama Papers also reveal that “current or former high-ranking officials of the secret services of at least three countries... Saudi Arabia, Colombia and Rwanda” are listed amongst the company’s clients, the Sueddeutsche said.

Among them was Sheikh Kamal Adham, the former Saudi intelligence chief who died in 1999. Adham “spent the 1970s as one of the CIA’s key intermediaries” in the Middle East, the daily said.

The Sueddeutsche Zeitung received the huge stash of Mossack Fonseca documents from an anonymous source and shared them with more than 100 media groups through the International Consortium of Investigative Journalists.

A week after the first revelations, the documents have shed light on how the world’s rich and powerful have used offshore companies to stash their assets, forcing Iceland’s prime minister to resign and putting pressure on a slew of other leaders around the world.

VanHalen · Apr 14, 2016

Panama’s president warns France of blowback over tax-haven listing as an ‘uncooperative state’

PUBLISHED : Wednesday, 13 April, 2016, 10:25am
UPDATED : Wednesday, 13 April, 2016, 10:25am

Agence France-Presse

Panama warned France on Tuesday of unspecified “diplomatic measures” if it doesn’t drop it from a blacklist of tax havens in the wake of the Panama Papers revelations.

“If France’s government doesn’t reconsider it’s position, Panama’s government will find itself obliged to take diplomatic measures,” President Juan Carlos Varela told reporters.

Following the Panama Papers reports showing how a Panama law firm helped wealthy people from France and other countries stash their assets in offshore companies, Paris last week put Panama back on its national list of Uncooperative States and Territories (ETNC), from which it had removed it in 2012.

France is also urging the European Union and all member states of the Organisation for Economic Cooperation and Development to follow suit.

Such an international designation would deal a heavy blow to Panama’s vital financial services sector, upon which the Panamanian government recently imposed reforms to move it towards global transparency standards.

Varela said Panama was asking Paris, “strongly and respectfully” to take back its “wrong and unnecessary” decision to blacklist his country. Such a designation entails financial sanctions such as heavy French withholding taxes on transactions.

Panama’s laws also provide for retaliation in such cases that can lead to public tenders being withheld from companies from offending states.

Panama has mixed such threats with affirmations that it is open to discussing how to improve transparency, all in a bid to head off wider action against it.

The Panama Papers, centred on a huge cache of documents pilfered digitally from the law firm Mossack Fonseca, has had repercussions around the world.

Iceland’s prime minister was forced to resign after his name appeared as one of the beneficiaries of an offshore company. Britain’s prime minister has had to disclose his tax records.

Russian President Vladimir Putin has sought to divert attention from his entourage by claiming it is all a US plot against him.

China has been censoring online forums and media to try to prevent the names of relatives close to the leadership circulating.

And wealthy citizens in Australia, France, Spain, Mexico, Peru, India and elsewhere face probes over suspected tax avoidance after their names figured in some of the 11.5 million documents.

VanHalen · Apr 16, 2016

The Panama connection: Hong Kong tycoon Li Ka-shing linked with law firm Mossack Fonseca

ABC report says Cheung Kong Infrastructure used law firm to organise subsidiaries in Panama and the British Virgin Islands; it also shows image of billionaire’s Hong Kong identity card

PUBLISHED : Wednesday, 13 April, 2016, 8:01am
UPDATED : Wednesday, 13 April, 2016, 8:01am

Eddie Lee

Hong Kong’s richest man, Li Ka-shing, is a client of the law firm at the centre of the Panama Papers scandal, and an image of the tycoon’s Hong Kong identity card was found in the firm’s leaked files, according to a media report.

The leaked data showed that Cheung Kong Infrastructure, the Cheung Kong group’s infrastructure arm, used Panamanian law firm Mossack Fonseca’s Hong Kong office to “organise” a string of related subsidiaries in Panama and the British Virgin Islands, Australian broadcaster ABC reported last week.

In reply to an inquiry by the Post, a spokesman for Cheung Kong Infrastructure said the group fully complied with the law of the countries it operated in.

The ABC programme reported that Cheung Kong Infrastructure required Mossack Fonseca to provide “the utmost secrecy” for its affairs.

The infrastructure company insisted that its documents be treated “as the high confidence” at the law firm, an alleged internal email obtained by the broadcaster read.

But the news report did not suggest any wrongdoing by the Cheung Kong company, while saying the firm failed to have the light shone on its tax affairs.

Industry insiders have also noted that a lot of companies in Hong Kong set up this type of offshore firm for various reasons and the practice itself was not inherently problematic, even though such vehicles commonly featured in corruption cases when they were used to secretly move ill-gotten gains abroad.

The ABC report noted that the Australian Taxation Office took two companies related to the Cheung Kong group to court in 2013 as the authority argued that the companies owed back taxes and penalties on their Australian electricity business.

In its 2013 annual report, Cheung Kong Infrastructure said it had paid A$61 million (HK$358 million) in total to the Australian tax office, being an amount equivalent to 50 per cent of the tax in dispute, including interest and penalties.

Recent investigations into the Panama Papers found that relatives of at least eight current or former members of China’s Politburo Standing Committee, the ruling party’s most powerful body, had been implicated in the use of offshore companies.

Apart from Li, several names well-known to Hongkongers also appeared in the leaked files, including the billionaire Kwok brothers.

According to the documents, property tycoons Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen were behind the security firm running Australia’s controversial offshore refugee processing camps.

It was also revealed in the papers that Mossack Fonseca managed at least six companies owned by action star Jackie Chan.

VanHalen · Apr 16, 2016

Top European countries demand crackdown on tax havens and end to secret shell companies in aftermath of Panama Papers

World Bank President Jim Yong Kim said the illicit financial activities enabled by tax havens undermined the fight against poverty.

PUBLISHED : Friday, 15 April, 2016, 11:04am
UPDATED : Friday, 15 April, 2016, 3:49pm

Agence France-Presse

Europe’s five leading economies have called for a crackdown on tax havens, urging the G20 powers to end the secrecy of shell companies that enables tax evasion and money laundering.

In the strongest reaction yet to the leaked “Panama Papers”, the finance ministers of Britain, France, Germany, Italy and Spain also proposed a blacklist of havens like Panama if they do not share corporate registry data.

“The recent extensive leaks from Panama show the critical importance of the fight against tax evasion, aggressive tax planning and money laundering,” the five EU ministers said in a statement.

Later, Spain’s ruling Popular Party announced acting Industry Minister Jose Manuel Soria, whose name had been linked to offshore companies, has resigned.

His resignation came days before Soria was due to appear in Parliament to explain his claim that he never ran or owned a Bahamian offshore company although his name appeared on leaked documents identifying him as director of a firm.

The proposal was made as the Spring Meetings of the World Bank and International Monetary Fund kicked off in Washington, with fighting tax evasion among issues under discussion to help countries strengthen finances and boost growth.

World Bank President Jim Yong Kim said the illicit financial activities enabled by tax havens undermined the fight against poverty.

“When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a tremendous negative effect on our mission to end poverty and boost prosperity,” he said.

In a letter to the G20 leading economies, meeting simultaneously in Washington, the five EU finance ministers proposed establishing transnational registries that would identify the beneficial owners of companies, trusts, foundations and other entities that had been able to hide from tax administrators and law enforcement.

That would extend the steps already taken under the 2014 “Common Reporting Standard” (CRS) agreement on sharing information about assets and accounts of signatories’ nationals.

Corrupt officials and criminals still can exploit cracks and loopholes to hide illicit financial activities despite that pact, the ministers said.

“The current events show that identifying the ultimate beneficial owner behind corporate structures is key to fighting tax evasion, money laundering and illicit finance effectively,” German Finance Minister Wolfgang Schaeuble said in a news conference.

The move was a reaction to the leak of thousands of documents on anonymously owned shell companies from Mossack Fonseca, a Panamanian law firm that specialised in setting up such firms.

The trove showed the use of shell companies by prominent politicians including close associates of Russian President Vladimir Putin, family members of Chinese leaders, British Premier David Cameron, and the leaders of Iceland and Argentina.

[IMF managing director Christine Lagarde. Photo: AP]

The leak placed Panama in the spotlight as one of the leading havens that have not joined the CRS agreement on sharing information on bank accounts and other assets.

The five threatened to create a blacklist of countries which do not cooperate on sharing data. “We want to have lists which make it possible to place sanctions on countries which don’t respect the rules,” French Finance Minister Michel Sapin said.

Under pressure, Panama said on Thursday it was ready to begin working together with the CRS system.

“Panama’s path to financial transparency is irreversible,” Vice-President Isabel de Saint Malo de Alvarado said in a statement. “We are fully and immediately committed to the implementation of bilateral automatic exchange of information consistent with the goals of the Common Reporting Standards.”

But the Oxfam anti-poverty group, which released on Thursday a paper showing how top US coproations have socked away US$1.4 trillion in profits in tax havens, said the European proposals are still too weak.

“If the proposed registry of beneficial owners of companies and trusts is hidden from the public, how can we know who is hiding their profits and fortunes and trying to avoid paying their fair share?” they said.

In the meetings that got underway on Thursday, both the IMF and World Bank continued to press countries to do more to support economic growth and prevent the world from backsliding toward recession.

They said the demand for financial support from struggling governments has risen to levels normally seen during crises.

“In the global economy, there are not many bright spots,” World Bank President Kim said. “The weakening global economy threatens our progress toward ending extreme poverty by 2030.”

“We are on alert, not alarm,” IMF chief Christine Lagarde said.

“The current policy responses that we are seeing need to go faster and need to go deeper.”

Lagarde also warned that Britain’s threatened pullout for the European Union was a “serious concern” for the global economy.

“It’s been a long marriage between members of the European Union,” she said. “It’s really my personal hope that it doesn’t break. Like all marriages, good talks can actually help and I hope that the dialogue can continue.”

'Panama Papers' Leak

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