‘Panama Papers’ calls for transparency

The leaked documents by the International Consortium of Investigative Journalists (ICIJ) could smear Panama’s image as an offshore haven for money laundering, even after it had exerted efforts to clear its name. The documents, from around 214,000 offshore entities, came from Mossack Fonseca, a Panama-based law firm with offices in more than 35 countries.
The leaked data, known as the ‘Panama Papers’, is likely the biggest leak of inside information in history. The leaked documents were reviewed by a team of more than 370 reporters from over 70 countries, according to the ICIJ.
Involving world leaders, celebrities and dozens of billionaires, the scandal if proven would be one of the most explosive in the nature of its revelations. Worse still, it may be the tip of iceberg that would lead to further revelations in other countries. In other words, it may be a domino effect to clandestine empire of money laundering.
Though the leaked documents may not be all illegal nor some of those named involved in crime, some cases may be at the heart of money laundering and tax evasions. The leakage of 11.5 million documents may have a bearing on Panama, whose leaders declared they would cooperate with further investigations, casting doubts that their country was being targeted for its successful investment model.
At least 33 people and companies listed in the documents were blacklisted by the US government for wrongdoing, the ICIJ said. Those involved must come clean to clear their names.
The vast stash of records was obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with media worldwide by the ICIJ.
Mossack Fonseca firm reacted angrily to revelation detailing the off-shore structures of many wealthy clients, describing it a as “crime” and an “attack” on Panama. “This is a crime, a felony,” Ramon Fonseca, one of the founders of Mossack Fonseca, said.
What makes an offshore account legal or not is often simply a question of whether it’s declared to tax authorities, said Professor Peter Hahn at London’s Institute of Financial Services.
The revelation is an opportunity for disclosure of chain owners of shell companies to prevent unscrupulous firms from misusing the banking system.
To clear its name from suspicious transactions, the government of Panama said it will cooperate with any legal probe resulting from the data leak.
“The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money,” José Ugaz, the chair of Transparency International, an advocacy group, said in a statement.
Panama has a lot at stake. It has a booming financial services sector, including revenue from its famous canal, accounting for nearly 80 percent of gross domestic product. It has one of the best sustained economic growth rates in Latin America, low inflation, and uses the US dollar as its currency.
Since the world financial crisis, efforts have been stepped up to crackdown on money laundering, which, so far, yielded fruits, but there are transparency loopholes still being exploited in the banking system. Secrecy that shrouds
accounts is at the core of such scams.
World leaders and bank CEOs must come together to ban secret companies that fuel money laundering and corruption. They should not allow the corrupt to benefit from ill-gotten wealth, of which some is used in activities that destabilize security.

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