PANAMA CITY, Panama (Reuters) – Panama’s President Juan Carlos Varela reaffirmed his country’s commitment to tax transparency after governments across the world began investigating possible financial wrongdoing by the rich and powerful after a leak of four decades of documents from a local law firm that specialized in setting up offshore companies.
The “Panama Papers” revealed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine through local firm Mossack Fonseca.
While holding money in offshore companies is not illegal, journalists who received the leaked documents said they could provide evidence of wealth hidden for tax evasion, money laundering, sanctions busting, drug deals or other crimes.
Speaking in Colon, Varela told media the leak has strengthened his government’s resolve to expand transparency in Panama’s financial system.
“We are allies with all countries in the fight for transparency in the country’s financial system. And not just in this country, but every country in the world. We welcome any publication or any investigation which protects the Panamanian and global financial systems so that it cannot be used at any time for any illicit act. On the contrary, these types of challenges strengthen us as a country as it reaffirms our commitment as president, as a government, to keep fighting for transparency in the Panamanian financial system,” Varela said.
The law firm, Mossack Fonseca, which says it has set up more than 240,000 offshore companies for clients around the globe, denied any wrongdoing and called itself the victim of a campaign against privacy. Mossack Fonseca, in a statement posted on its website on Monday (April 04), said media reports had “misrepresented the nature of our work.”
The Paris-based Organisation for Economic Cooperation and Development, which has pushed for more transparency on taxes, has previously said Panama “must put its house in order.” OECD said it had warned G20 finance ministers before the leaks that Panama was backtracking on a commitment to share information on accounts with other governments
