What do a Nobel laureate, “La Reina del Sur” and the president of a South American country all have in common? These and a few thousand other Latin Americans were named in the “Panama Papers” leak of eleven million documents from Panamanian law firm Mossack Fonseca purportedly assisting in tax evasion, circumventing sanctions, and money laundering. In light of the damaging allegations, the government of the isthmus had gone on a diplomatic offensive.
Deputy Minister Luis Miguel Hincapié on Tuesday blasted Organization for Economic Cooperation and Development (OECD) chief Angel Gurria for suggesting that Panama failed “to meet the international tax transparency standards are now out there in full public view.” he claimed Gurria made “allegations and insinuations whose falsity is easily demonstrated.” Hincapié further accused Gurria of discriminating against Panama by not pointing the finger at other jurisdictions like the British Virgin Islands where half of firms mentioned in the “Panama Papers” are registered in.
The official earlier today also implied that the OECD has coerced Panama as part of its campaign to place international standards on tax transparency.
“(Panama) for a long time has suffered pressure from the OECD so that the country can sign a multilateral treaty to exchange fiscal information,” Hincapié mentioned at a press conference.
“We only agreed in the interchange of information on a bilateral basis and in specific cases,” he said.
The OECD hasn’t been the only foreign body receiving criticism from the Panamanian government. Minister of the Presidency Alvaro Aleman threatened with “retaliation measures” against France if the European country goes through with placing the isthmus on its blacklist of tax havens.
Economics Minister Dulcido De La Guardia rejected claims that Panama is a “fiscal oasis” and claimed “three-quarters of income received by the government comes from taxes paid by nationals and foreigners residing in the country.” (Though this does raise the question of where does the other 25% come from).
The tactics taken by Panama’s government are similar to the rhetoric deployed in October 2014 when authorities in neighboring Colombia placed the country on its tax haven blacklist with an estimated $2 billion to $7 billion in assets stashed by Colombians there. Much like Aleman this week, De La Guardia said that Panama would retaliate and “study unspecified measures against countries that ‘discriminate against Panama.’” (Both states backed down after agreeing to create a double taxation treaty that has not been reached despite multiple rounds of talks).
Mossack Fonseca are also trying to spin the narrative in their favor with co-founder Ramon Fonseca alleging that the company was targeted in an outside hack. A statement from Mossack Fonseca made, among several claims, that due diligence was carried out to ensure that clients did not engage in illicit activity. But the “Panama Papers” documents appear to indicate otherwise:
More directly, a new report alleges that Mossack Fonseca gave preferred banks special treatment when it came to verifying that their customers weren’t involved in illegal activities, under sanctions, or otherwise up to no good. It apparently dubbed this practice “DD light” (Due Diligence light).
The firm cites its “duly established policies and procedures” for dealing with so-called politically exposed persons—considered high-risk clients, given their offices. So it doesn’t look good that when Sergey Roldugin, a close confidant of Russian president Vladimir Putin and godfather to his eldest daughter, was asked on incorporation forms if he has relations with political figures, he simply answered “no” and became the owner of offshore companies that handled tens of millions of dollars worth of transactions.
So who exactly are some of the figures named in the “Panama Papers”? They include:
* Peruvian Noble laureate Mario Vargas Llosa even though his publisher denied that he was involved with offshore firm Talome Services Corp. of the British Virgin Islands.
* Portuguese business mogul Idalecio de Castro Rodrigues de Oliveira who was accused of paying bribes to leading Brazilian legislator Eduardo Cunha.
* Head of the Chilean branch of corruption watchdog Transparency International, Gonzalo Delaveau, who subsequently quit his post.
* Argentine President Mauricio Macri who reportedly served as director in Fleg Trading Ltd. offshore society.
* Marllory Chacón Rossell, nicknamed “La Reina del Sur” (“The Queen of the South”), she is accused of money laundering for Sinaloa cartel boss Joaquín "El Chapo" Guzmán.
* At least 800 Colombians including ex-Air Force intelligence chief Gen. Ricardo Rubiano-Groot.
* Juan Armando Hinojosa Cantú, an associate of Mexican President Enrique Peña Nieto involved in the “Casa Blanca” political scandal.
* Uruguayan lawyer Juan Pedro Damiani who promptly resigned as an ethics judge for beleaguered soccer governing body FIFA after the leak.
* Puerto Rican reggaeton singer Daddy Yankee who was accused of “assigning the rights of one of his concerts in Peru in exchange for the transfer of $350,000 to an offshore bank account.”
YouTube Source –Vox
Online Sources (English) – BBC News, Reuters, The Straits Times, Yahoo News, The Economist, centralamericandata.com, Gizmodo, Quartz, International Consortium of Investigative Journalists, Latina, Buenos Aires Herald, teleSUR English
Online Sources (Spanish) – La Estrella de Panama, La Prensa, Forbes Mexico, RCN Radio, infobae, Peru.com