Panama's president vows change after offshore leaks

Apr 07, 2016, 5:38 AM EDT
Panamanian President Juan Carlos Varela.
(Source: Cumbre Panamá/flickr)

Panama is creating an international panel to help improve transparency in its offshore financial industry.

The BBC reports:

The move follows the leak of millions of documents from law firm Mossack Fonseca, showing it helped some clients evade tax and avoid sanctions. Several countries are probing possible financial crimes by the rich and powerful in the aftermath of the leak. President Juan Carlos Varela said Panama would work with other countries over the revelations. "The Panamanian government, via our foreign ministry, will create an independent commission of domestic and international experts," he said in a televised address. The panel, he said, would examine working practices and propose measures that could be shared to strengthen the transparency of the financial and legal systems. Correspondents say the president is eager to defend his country against a "media attack" by wealthy countries that he says are unfairly stigmatising him following the leak. Mossack Fonseca, for its part, says that it has been the victim of a hack. Mossack Fonseca partner Ramon Fonseca insisted the leak was not an "inside job" - the company had been hacked by servers based abroad. It has now filed a complaint with the Panamanian attorney general's office.

Reuters writes:

The U.S. Treasury Department intends to soon issue a long-delayed rule forcing banks to seek the identities of people behind shell-company account holders, after the "Panama Papers" leak provoked a global uproar over the hiding of wealth via offshore banking devices. A department spokesman said on Wednesday the rule would "soon" be turned over to the White House for review and issuance, but did not confirm any timetable for the initiative, which has taken years. Governments around the globe have launched probes into possible financial wrongdoing after 11.5 million documents from the Panamanian law firm Mossack Fonseca, nicknamed the "Panama Papers," were leaked to the media and reports emerged Sunday. Mossak Fonseca has said it was the victim of a computer hack, and that it has consistently acted appropriately. The papers offer "validation for those who have been screaming for a decade" about the need for financial institutions in the United States and elsewhere to address risks of money laundering, terror finance and other crime by identifying people who clandestinely control legal entities, former Treasury official Chip Poncy told Reuters.

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