The government of Panama has established a committee of independent experts to make recommendations on cleaning up the country’s financial system.
Decision was taken after leaks of documents from the Panamanian law firm Mossack Fonseca caused an international uproar over offshore accounts.
President Juan Carlos Varela has called for the review after the “Panama Papers” leak suggested rich foreigners were using the accounts to hide their wealth.
The advisory group includes Nobel economics laureate Joseph Stiglitz, former Panamanian President Nicolas Ardito Barletta, and former Panama Canal administrator Alberto Aleman Zubieta. The group is to present recommendations to Varela in six months.
About Panama Papers Leak:
The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca.
The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC.
The revealed documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
A $2bn trail leads all the way to Vladimir Putin. The Russian president’s best friend – a cellist called Sergei Roldugin – is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married.
Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davio Gunnlaugsson.
An offshore investment fund run by the father of British prime minister David Cameron avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents to sign its paperwork. The fund has been registered with HM Revenue and Customs since its inception and has filed detailed tax returns every year.
What is Mossack Fonseca?
It is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries.
It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.