World Bulletin / News Desk
The co-founder of the law firm at the center of the Panama Papers scandal says the fallout has set off a "thriving" boom in the creation of tax shelters in the United States.
Juergen Mossack, who partnered with Ramon Fonseca to create the Panamanian firm Mossack Fonseca, said in a document obtained Thursday by AFP that after the Panama Papers leak a year ago, the number of new tax shelters created has fallen by 30 percent in Panama and elsewhere.
"Whilst Panama tries hard to be whiter than white, others are profiting," he wrote.
The Panama Papers, published a year ago in a leak of more than 11 million documents belonging to Mossack Fonseca, spurred fresh government action against the secretive world of tax fraud and evasion.
Before the scandal exposed the global extent of offshore tax havens, Panama was the last major financial center refusing all exchange of banking information.
But since then, Panama has adopted new legislation and signed up to the international fight against tax fraud, with all the transparency required.
Law firms in Panama have been required to undertake due diligence -- to know their clients and the final beneficiaries of the companies they create -- since 2015.
Mossack said US jurisdictions have "zero transparency" and that is why, after the scandal, there has been an increase in clients creating tax shelters in the US who previously would have gone to Panama.
According to the Panamanian economy ministry, the creation of offshore companies fell 27 percent in 2016 from the prior year.
No one has been arrested in the Panama Papers leaks scandal. In this Central American country, tax evasion is not a crime.
But Mossack and Fonseca have been placed in provisional detention on money-laundering charges as part of a sprawling Brazilian corruption probe dubbed "Operation Car Wash."
Mossack's letter, written from detention, was dated April 10.
Panama's chief prosecutor, Kenia Porcell, said his office was cooperating with European countries investigating tax fraud revealed in the Panama Papers.
The Panama Papers linked some of the world's most powerful leaders, including Russian President Vladimir Putin, former British prime minister David Cameron and others to unreported offshore companies.
Mossack said more than 98 percent of his firm's clients were not Panamanian nationals and that 85 percent of the companies noted in the Panama Papers were set up to comply with other jurisdictions.
According to him, "less than one percent of all the companies incorporated" by Mossack Fonseca could have "a possible wrongful use."
If some of the companies set up by Mossack Fonseca were used by their owners to try to cheat on their taxes "we would not have been aware of that, since no client in his right mind would tell people he has never met that he would use the company for an illegal purpose," he said.
"Such a disclosure would automatically disqualify him from being accepted as a client."
Since mid-October, Peshmerga have withdrawn from vast majority of ‘disputed’ parts of Iraq, Kurdish official says
Nearly 63 percent of 2,000 American participants oppose moving US Embassy to Jerusalem, survey indicates
Tensions continue to mount in occupied territories following US recognition of Jerusalem as Israel’s capital
Defeat leaves Republicans with razor thin 51-49 majority in Senate
President Donald Trump has not changed his position on North Korea but does not oppose efforts to initiate talks
'Trump you failed to protect your nation,' Akayed Ullah allegedly wrote on Facebook
Vast areas have been destroyed, hundreds of thousands of people have been evacuated and thousands of firefighters are working around the clock.
Trade dispute ends Boeing’s CAN$19 billion bid to replace aging CF-18s fighters
One third of those detained are minors, Palestinian activists say
ISIL has recently suffered a string of defeats in Iraq and Syria
Turkish deputy premier says some leading Greek Cypriots say they would prefer to 'drink poison' than use Turkish water
'I want to shoot a movie in Jerusalem when it is liberated,' says Nawras Abu Saleh
After meeting in Ottawa with officials from the nation's 10 provinces and three territories, Finance Minister Bill Morneau said he has agreed to give the provinces 75 percent of the monies.
Maduro's ruling socialists triumphed as expected in mayoral polls Sunday, taking 300 of the country's 335 mayorships after a boycott by the main opposition parties.
US president revises space agency’s policy, undoing Obama’s concentration on Mars
US-led global coalition will continue to operate and support local forces in Syria, Pentagon spokesman says