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New Panama Papers leak shows chaos at Mossack Fonseca over unidentified clients

21/06/2018 John Evans, International Editor of thewealthnet,

A new leak of documents from Mossack Fonseca, the firm at the centre of the Panama Papers scandal, shows it could not identify the owners of up to three quarters of companies it administered.

Two months after discovering the data hijack, Mossack Fonseca was unable to identify the beneficial owners of more than 70 percent of 28,500 active companies in the British Virgin Islands as well as 75 percent of companies in Panama, according to the documents. 

The new leak contains 1.2 million documents dating from before the Panama Papers went public in April 2016 to December 2017. The data was obtained by Germany’s Suddeutsche Zeitung which shared it with the International Consortium of Investigative Journalists (ICIJ), and has in turn been published by the BBC and the Guardian in the UK. 

Mossack Fonseca announced recently that it was closing down. 

In the wake of the Panama Papers and under pressure from the UK government, the British Virgins and other British Overseas Territories are establishing registers of beneficial ownership for companies in their jurisdictions. But the register relies upon offshore service providers, like Mossack Fonseca, to provide the information.

The BVI denies the register is secret and says it is accessible to the authorities and relevant UK authorities on request within one hour. They say they have been at the forefront of global transparency initiatives.

A spokesman said: "A public register is not a silver bullet. It is not about who can see the information, it's about the information being verified, accurate, and therefore useful to law enforcement. A verified register is a far more robust and effective approach to ensure transparency than an unverified public register."

Last month the UK government adopted an amendment to its Sanctions and Anti-Money Laundering Bill to force overseas territories to establish public registers by 2020. The BVI government is considering a legal challenge.

The original documents show the various ways in which the rich reported to exploit secretive offshore tax regimes. Twelve national leaders were among 143 politicians, their families and close associates shown to have been using offshore tax havens. They allegedly included the Pakistani prime minister, Nawaz Sharif; the former vice-president of Iraq, Ayad Allawi; the president of Ukraine, Petro Poroshenko and the prime minister of Iceland, Sigmundur Gunnlaugsson.

The new leak suggests Mossack Fonseca drafted reports for law enforcement concerning at least a dozen of its own clients following the Panama Papers, in some instances citing articles by journalists as supporting evidence.

Amid pressure from regulators and law enforcement agencies, the firm also faced complaints from angered clients.

Several countries are understood to have raised millions in additional tax revenue due to all the disclosures. HMRC’s chief executive told a parliamentary committee that it was expected the disclosures would bring in an extra £100 million of revenue while Germany was reported to have raised EUR140 million using the information.

 

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