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    Panama Papers

    Panama Papers One Year On: 'Little Due Diligence,' Laws Not Enforced

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    A year on from the publication of the Panama Paper, April 3, 2016 - history's biggest data leak - which exposed the massive use of offshore tax havens by the rich and powerful, a new report says little has changed and there is still "little due diligence" on luxury goods buyers and insufficient law enforcement.

    The Panama Papers affair began with the leak, by the International Consortium for Investigative Journalism (ICIJ), of 11.5 million confidential documents that provided detailed information about more than 214,000 offshore companies listed by the Panamanian corporate service provider Mossack Fonseca, including the identities of shareholders and directors of the companies. The documents show how wealthy individuals, including public officials, hide their money from public scrutiny.

    It led to the European Commission calling for a crackdown on secrecy and the establishment of "fairer, more transparent and more effective taxation" and the "strengthening the cooperation between fiscal authorities across the EU." 

    Governments in more than 70 countries have launched over 150 investigations, inquiries, audits and probes into the affairs of thousands of people and corporations linked to Panama Papers. In March 2017, Malta's tax office announced it had recovered more than US$10 million as a result of investigations sparked by the Panama Papers and another ICIJ project, Swiss Leaks.

    However, on year on, a new report from Transparency International (TI) — Tainted Treasures: Money Laundering Risks in Luxury Markets — shows in detail how luxury goods sellers, from jewellers and real estate agents to yacht builders and diamond brokers, do little if anything to check if their customers are using corrupt money to fund their high-end purchases.

    TI found that "little due diligence" is done on luxury goods buyers and where there are laws, there is little enforcement.

    "Legislation and policy to prevent money laundering in the luxury sector also have weaknesses. Based on an assessment of existing sources such as regulatory reports and sector-specific studies, this scoping report finds that, while there is some variation across countries, current levels of oversight and enforcement by authorities are limited in leading luxury markets including China, France, Germany, Italy, Japan, the UK and the US," the report says.

    "How can it be that in Antwerp, the largest diamond exchange in the world, no suspicious activity reports by the precious stones sub-sector had been filed up to 2014, despite this market being identified as having a high money laundering risk?" TI said.

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    Tags:
    tax transparency, Panama Papers, tax haven, tax evasion, tax breaks, International Consortium of Investigative Journalists (ICIJ), Mossack Fonseca, Transparency International, Italy, Germany, China, United Kingdom, Malta, Panama
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