Probes opened as large banking firms and politicians implicated in tax evasion by 11.5 million tax documents dubbed the 'Panama Papers'

A customer counts his US dollar money in a bank March 10, 2016.
A customer counts his US dollar money in a bank March 10, 2016.

Governments across the world began investigating possible financial wrongdoing by the rich and powerful on Monday after a leak of four decades of documents from a Panamanian law firm that specialised in setting up offshore companies.

The leaks cover a period over almost 40 years, from 1977 until last December, and allegedly show that some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals and tax evasion.

According to the documents, 140 political figures - including 12 current or former heads of state - are involved in the alleged network.

Leading figures responded to the leaks with denials as prosecutors and regulators began a review of the reports from the investigation by the US-based International Consortium of Investigative Journalists (ICIJ).

The US Department of Justice would determine whether there was evidence of corruption and other violations of US law, a spokesman said. A White House spokesman said that "in spite of the lack of transparency that exists in many of these transactions," there were US experts who could find out whether they violated sanctions and laws.


The FMA, Austria's financial markets regulator, is investigating whether lenders Raiffeisen Bank and Hypo Landesbank Vorarlberg followed rules against money laundering after they were named in the international data leak.

Among the more than 100 news organisations that jointly investigated the documents' contents, two Austrian media reported a connection between the Raiffeisen bank and a confectionery company owned by Ukrainian President Petro Poroshenko.

Local newspapers reported that the bank had made a loan of $115 million to sweets firm Roshen secured against the holdings of a company based in the British Virgin Islands.

An investigation is undergoing to examine whether procedures such as checks on the nature of transactions and those involved in them were adhered to, an FMA spokesman said on Monday, adding that it can report cases to the criminal authorities if necessary.

Raiffeisen responded in a statement saying that it had complied with legal provisions on the prevention of money laundering, but could not comment on specific cases due to banking secrecy policies.

Hypo Landesbank Vorarlberg made no immediate comment.

Ukraine's Poroshenko

Ukrainian lawmakers have suggested that the country's parliament should investigate allegations against President Poroshenko and his confectionary firm Roshen, following the global leak in which he was also named.

Poroshenko did not immediately comment on the accusations, while his office said a law firm representing companies named in the leaks would make a statement later on Monday.

The leaked documents did not show that Poroshenko committed any crimes, a senior official in Ukraine's General Prosecutor's office said.

Hands are silhouetted against a backdrop projected with the picture of various currencies of money in this April 4, 2016, illustration. (Reuters)
Hands are silhouetted against a backdrop projected with the picture of various currencies of money in this April 4, 2016, illustration. (Reuters)

An alleged unnamed spokesman of Poroshenko, who published a response on the ICIJ website, said the company known as Prime Asset Partners Limited - of which Poroshenko became the sole shareholder - was part of a corporate restructuring to help sell Roshen in line with prevailing market practices.

"I think it will have an impact in terms of further erosion of confidence in Poroshenko," Serhiy Leshchenko, a lawmaker in Poroshenko's faction said.

Leshchenko and a fellow reformist lawmaker - Mustafa Nayyem - said Ukraine's parliament, the Rada, should launch a special investigation into the allegations.

Only parliament can initiate an investigation into a sitting president under Ukrainian legislation.

Poroshenko came to power in 2014, facing criticism for his ownership of Roshen. Poroshenko had failed sell the firm last year - after pledging to do so - due to unfavourable market conditions.


The French Finance Ministry said on Monday the government will seek access to the leaked Panama documents.

Finance Minister Michel Sapin said in a statement that "in application of the tax conventions with its partners, France will seek the transmission of the 'Panama papers' data."

Once authorities have acquired and verified the information, the government will review the taxes of the individuals involved and apply penalties, notably for foreign bank account and shell companies that were not declared, the statement added.

French President Francois Hollande said earlier on Monday that the "Panama Papers" revelations were good news as they could help to boost tax revenues.

Putin accused of hiding billions

Russian President Vladimir Putin was also alleged to have engaged in offshore transactions worth billions of dollars in the scandal, accusations which his spokesman has denied.

The spokesman said the revelations aim to discredit the Kremlin leader ahead of Russia's upcoming elections.

"The main target of this disinformation is our president, especially in the context of the upcoming parliamentary elections and in the context of a longer-term perspective - I mean presidential elections in two years," Dmitry Peskov told a conference call with journalists.

"This Putinophobia abroad has reached such a point that it is in fact taboo to say something good about Russia."

Peskov said the publications contained "nothing concrete and nothing new" about Putin.


Brazilian politicians have also been named as clients of the Mossack Fonseca legal firm accused of facilitating tax evasion following a massive data leak

Brazilian daily newspaper O Estado de S.Paulo revealed names in the leaked files including some from Brazil's largest party, the PMDB, which withdrew from President Dilma Rousseff's coalition last week. Some important personages of Brazilian's most prominent opposition party in the country appeared in the leaks, as well as others from the PDT, PP, PSB, PSD and PTB parties.

No politicians from Roussef's Worker's Party appeared in the leaked documents, although at least 57 people or companies that had already been under investigation in Brazil for alleged involvement in a graft scheme at state-run oil firm Petroleo Brasileiro SA were mentioned in the documents.


Argentinian President Mauricio Macri on Monday denied any wrongdoing in his connection with an offshore company in the Bahamas which emerged in a leak of documents.

The leaked documents showed that he moonlit as director of Fleg Trading Ltd, which was founded in 1998 and dissolved in January 2009. Opposition lawmakers demanded that he explain his role at the offshore company.

During a television interview with La Voz, Macri said that his tycoon father Franco Macri, had founded the company through a "legal operation".

"It was an offshore company to invest in Brazil, an investment that ultimately wasn't completed, and where I was director," he said. "There is nothing strange about this."

The ICIJ highlighted that Macri had not disclosed his connection with Fleg Trading Ltd in his assets declarations after he became Buenos Aires mayor in 2007. In response, the Macri administration stated that Macri had never had a stake in the firm so he had not been required to disclose the connection in those declarations.


Authorities in the Netherlands will investigate allegations related to potential Dutch millionaire tax evaders.

The tax office will "actively look at whether there i data related to levying of tax," the country's Finance Ministry said in a statement on Monday.

Mossack Fonseca used to have an office in the Netherlands for five years which closed last month.


Norway's Financial Supervisory Authority (FSA) said on Monday that revelations that top Norwegian bank DNB helped customers set up offshore companies in the Seychelles could undermine general trust in the industry.

DNB's Seychelles activities were initially reported by daily Aftenposten, quoting from the leaked documents.

FSA head Morten Baltzersen said "customer arrangements of the kind that have now emerged can contribute to weakening the trust in affected banks and of the financial industry in general," adding that the regulator will ask for an explanation from the boards of affected banks.


Sweden's Financial Supervisory Authority has contacted authorities in Luxembourg to ask for information related to allegations that the banking group Nordea helped clients set up accounts in offshore tax havens after information about Nordea was included in the leaks.

Christer Furustedt, head of the FSA department, said "we take this extremely seriously."

Nordea had been fined the maximum 50 million crowns ($6.14 million) in May 2015 for deficiencies in its approach to tackling money laundering.


Following the reports, China has moved to limit local access to coverage of the matter with state media denouncing Western reporting on the leak as biased against non-Western leaders.

While the Chinese government has yet to respond publicly to the allegations - the Cabinet's news office did not immediately answer a request for comment - state media have largely avoided any reporting of the "Panama Papers."

Source: TRTWorld and agencies