EU set to add Bahamas, U.S. Virgin Islands to tax haven blacklist

BRUSSELS – The Bahamas, the U.S. Virgin Islands and Saint Kitts and Nevis are set to be added next week to a European Union blacklist of tax havens, raising to nine the number of jurisdictions on it, an EU document seen by Reuters shows.

The decision, taken by EU tax experts, is set to be endorsed by EU finance ministers at a regular monthly meeting on Tuesday, when the 28 EU governments are also expected to delist Bahrain, the Marshall Islands and Saint Lucia.

As a result of both moves, the blacklist would maintain nine jurisdictions deemed to facilitate tax avoidance. The other six are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.

The document, prepared by EU officials and dated March 8, also adds Anguilla, The British Virgin Islands, Dominica and Antigua and Barbuda to a so-called grey list of jurisdictions which do not respect EU anti-tax avoidance standards but have committed to change their practices.

The grey list includes dozens of jurisdictions from all over the world.

Blacklisted jurisdictions could face reputational damage and stricter controls on their financial transactions with the EU, although no sanctions have been agreed by EU states yet.

Those who are in the grey list could be moved to the blacklist if they do not honor their commitments.

Caribbean islands hit by hurricanes last year were given more time to comply with EU tax transparency standards when the bloc’s blacklist was established in December.

Earlier this month, EU experts decided to propose the delisting of Bahrain, the Marshall Islands and Saint Lucia, a document dated March 2 showed.

That attracted criticism from anti-corruption activists who called for disclosure of the commitments made by the delisted jurisdictions. These engagements remain secret.

The initial blacklist included 17 jurisdictions, but after one month eight were removed. They were Barbados, Grenada, South Korea, Macau, Mongolia, Tunisia, the United Arab Emirates and Panama. That move was also widely criticized by some EU lawmakers and activists.

Panama’s delisting caused a particular outcry as the EU process to set up the tax-haven blacklist was triggered by publication of the Panama Papers – documents that showed how wealthy individuals and multinational corporations use offshore schemes to reduce their tax bills.

EU countries were not screened. They were deemed to be already in line with EU standards against tax avoidance, though anti-corruption activists and lawmakers have repeatedly asked for some EU members such as Malta and Luxembourg to be blacklisted.

(Reporting by Francesco Guarascio; Editing by Mark Heinrich)

Bomb kills reporter who covered Malta’s ‘Panama Papers’ link

VALLETTA, Malta — A Maltese investigative journalist who exposed her island nation’s links to offshore tax havens through the leaked Panama Papers was killed Monday when a bomb exploded in her car, Malta’s Prime Minister Joseph Muscat said.

Daphne Caruana Galizia, 53, had just driven away from her home in Mosta, a town outside Malta’s capital of Valletta, when the bomb went off, sending the vehicle’s wreckage spiraling over a wall and into a field.

The wreckage of the car of investigative journalist Daphne Caruana Galizia lies next to a road in the town of Mosta, Malta, Monday, Oct. 16, 2017. (Rene Rossignaud/AP)

Muscat says Caruana Galizia’s death resulted from a “barbaric attack” that also amounted to an assault on freedom of expression. He described her as “was one of my harshest critics, on a political and personal level,” as he denounced her slaying.

Politico named Caruana Galizia as one of 28 Europeans who are “shaping, shaking and stirring” Europe. She revealed that Muscat’s wife, Michelle, as well as Muscat’s energy minister and the government’s chief-of-staff, held companies in Panama by looking into the 2016 document leak. Muscat and his wife deny they held such companies.

Opposition leader Adrian Delia called the killing a “political murder.”

Caruana Galizia had been sued for libel because of various articles she wrote on her blog “Running Commentary,” and she had filed a report with the police two weeks ago that she was receiving threats.

Monday evening’s Parliament session was scrapped, except for briefings about the bombing scheduled to be given by Muscat and Delia, the opposition leader.

In June, Muscat was sworn in for a second term as prime minister following snap elections he had called to reinforce his government as the Panama Papers’ leak indicated his wife owned an offshore company. The couple denies wrongdoing.

The leak exposed the identities of the rich and powerful around the world with offshore holdings in Panama.

To fight tax dodging, Denmark will buy leaked Panama Papers

A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm in Panama City, Thursday, April 7, 2016. Earlier on Wednesday the Panamanian based law firm filed a complaint with Panamanian prosecutors, alleging that the 11.5 million documents revealed in the leak were stolen by a hacking attack from somewhere in Europe. (AP Photo/Arnulfo Franco)

A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm in Panama City, Thursday, April 7, 2016. (AP Photo/Arnulfo Franco)

COPENHAGEN, Denmark – Denmark will buy leaked data from a Panamanian law firm that helped customers open offshore companies to avoid paying taxes, the Scandinavian country’s taxation minister said Wednesday.

Karsten Lauritzen said Denmark’s tax authorities had received an anonymous offer over the summer to acquire data from the so-called “Panama Papers” that could involve up to 600 people. The ministry said communication with the anonymous source was made via encrypted channels.

Lauritzen says “everything suggests that it is useful information” and “we owe it to all Danish taxpayers who faithfully pay their taxes.”

“We must take the necessary measures in order to catch tax evaders who hide fortunes in, for instance, Panama,” Lauritzen said in a statement. “Therefore, we agreed that it is wise to buy the material.”

He said, without providing details, that “there may be fundamental problems associated with buying leaked information,” and taxation authorities “should be cautious.”

He said Wednesday that other parties in 179-seat Parliament supported buying the documents, which are part of a stash of about 200,000 documents leaked from law firm Mossack Fonseca. “The material contains relevant and valid information about several hundred Danish taxpayers,” he said. It was not clear how many lawmakers backed the plan as there had been no publicvote in the assembly.

Lauritzen said the data cost a single-digit million kroner, where 1 million kroner is equivalent to $150,000.

Nobel Laureate Stiglitz Leaves Panama Finance Committee

Panama President Juan Carlos Varela, right, shakes hands with Nobel economics laureate Joseph , as Mark Pieth, a professor of criminal law and criminology at the University of Base, looks on, in Panama City, Friday, April 29, 2016. The government of Panama has established a committee of independent experts to make recommendations on cleaning up the country's financial system, after leaks of documents from the Panamanian law firm Mossack Fonseca caused an international uproar over offshore accounts. The advisory group includes Stiglitz and Pieth. (AP Photo/Arnulfo Franco)

Panama President Juan Carlos Varela, right, shakes hands with Nobel economics laureate Joseph , as Mark Pieth, a professor of criminal law and criminology at the University of Base, looks on, in Panama City, Friday, April 29, 2016. (AP Photo/Arnulfo Franco)

PANAMA CITY – Nobel economics laureate Joseph Stiglitz has quit a committee set up by Panama’s government to study the country’s financial system following the leak of a trove of data about offshore accounts set up by a Panamanian law firm.

Panama’s foreign ministry said Saturday that Stiglitz resigned over “internal differences” that it did not explain. Swiss law professor Mark Pieth also resigned.

The committee of experts was set up in April following the international uproar over the leak of the so-called “Panama Papers” revealed details on offshore accounts that helped foreigners shelter their wealth.

The panel is supposed to give recommendations on making it more difficult for people to use Panama’s financial services sector for illegal activities.

Four experts continue to work on the committee.

Argentina’s Macri to Repatriate $1.3 Million from Bahamas

BUENOS AIRES, Argentina – President Mauricio Macri said Monday that he will repatriate $1.3 million in savings from the Bahamas and use the money to buy Argentine treasury bonds because he is confident the struggling economy will recover and thrive.

FILE - In this April 7, 2016 file photo, Argentina's President Mauricio Macri speaks at the government house in Buenos Aires, Argentina. Macri said Monday, May 30, that he will repatriate $1.3 million in savings from the Bahamas. He also said he will use the money to buy Argentine treasury bonds because he is confident the country's economy will recover and thrive. (AP Photo/Natacha Pisarenko, File)

Argentina’s President Mauricio Macri (AP Photo/Natacha Pisarenko, File)

Macri said the money was deposited in Merrill Lynch accounts in Switzerland and the U.S., but it was transferred to the Bahamas after Swiss private bank Julius Baer Group bought the Merrill Lynch overseas wealth management unit from Bank of America.

Macri, who was Buenos Aires mayor, won the presidency last year on a promise to jumpstart Argentina’s economy and root out endemic corruption.

He recently set up a blind trust to handle his financial holdings in response to criticism over his role in two offshore companies that emerged in the “Panama Papers” leak. Macri, the son of one of Argentina’s wealthiest people, said the companies were family businesses and he was a figurehead without compensation.

A federal prosecutor has requested authorization to investigate whether Macri “maliciously” omitted his role in the offshore companies in his annual tax declarations. Macri said he is open to being investigated and has nothing to hide.

The Associated Press

Finance Leader: Bribes Eat Up $2 Trillion in Global Economy

WASHINGTON (AP) — A global finance leader asserts that as much as $2 trillion, or 2 percent of the global economy, in bribe money courses through developing and developed countries each year, undermining economic growth and diminishing basic services most needed by the poor.


“Corruption has a pernicious effect on the economy,” the International Monetary Fund’s managing director, Christine Lagarde, wrote in an essay published Wednesday by the global lending agency, one day before an anti-corruption summit in London.

Lagarde said corruption hinders domestic and foreign investment and leads to less social spending on education and health care, which mostly hurts the poor. The $2 trillion value for bribes is an IMF estimate.

In addition to the economic costs, corruption has broader “corrosive impacts” by undermining trust in government and eroding ethical standards, Lagarde added.

The issue of global corruption has gained momentum after the leak of millions of confidential documents from a Panamanian law firm. The Panama Papers showed how some of the world’s richest people hide assets in shell companies to avoid paying taxes.

The London conference Thursday was expected to draw politicians from 40 countries and representatives from the IMF and the World Bank. Lagarde’s essay comes days after hundreds of economists urged world leaders to abolish tax havens, saying they benefit rich individuals and multinational corporations and increase inequality.

Lagarde urged governments to strengthen the rule of law and increase transparency in order to discourage those offering bribes and those accepting them. She also said it was important to liberalize and deregulate economic activity in order to remove the lure of corruption.

“The key objective is to develop a cadre of public officials who are … independent from both private influence and political interference,” Lagarde wrote.

The Associated Press

Panama Papers Include Nearly 500 Dominican Companies

SANTO DOMINGO, Dominican Republic – The Washington-based International Consortium of Investigative Journalists (ICIJ) has published data related to the so-called Panama Papers, which includes 486 offshore entities with origins in the Dominican Republic.

The data published by the ICIJ includes the addresses of people and companies from more than 200 countries, representing what the ICIJ calls is “the largest ever release of information about offshore companies and the people behind them.” The ICIJ has led the investigation alongside the German daily Süddeutsche Zeitung.

Singer-songwriter Juan Luis Guerra (Photo by Astrid Stawiarz/Getty Images for SiriusXM)

Singer-songwriter Juan Luis Guerra (Photo by Astrid Stawiarz/Getty Images for SiriusXM)

World famous singer Juan Luis Guerra is featured among them. The offshore entities of Dominican origin include 268 official, 67 intermediaries and 157 addresses, and include references to entrepreneurs and political figures from the Caribbean nation. Attorneys represent most of the companies.

In a brief statement,Guerra’s manager, Amarilys Germán, stated, “The Mango Team Inc. enterprise was created for bookings abroad and to limit risks. Both Juan Luis and his enterprises comply with the law and with the payment of taxes.”

The Panama Papers include the names of more than 200,000 companies, foundations and funds that are part of an ongoing investigation. The ICIJ states that “there are legitimate uses for offshore companies” and that it is not attempting to “suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.” The information is available to the public through the website.

The scandal involves more than 11.5 million documents from the Mossack Fonseca law offices, which specializes in capital management in so-called tax havens. The companies, foundations and funds included in the data are based in 21 of these tax havens, from Hong Kong and the British Virgin Islands to the state of Nevada in the U.S.  

Inter News Service

Panama Papers Offshore Companies Data Spurs Anti-Graft Moves

A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm in Panama City, Thursday, April 7, 2016. Earlier on Wednesday the Panamanian based law firm filed a complaint with Panamanian prosecutors, alleging that the 11.5 million documents revealed in the leak were stolen by a hacking attack from somewhere in Europe. (AP Photo/Arnulfo Franco)

The Arango Orillac Building lists the Mossack Fonseca law firm in Panama City (AP Photo/Arnulfo Franco)

TOKYO – The latest release of the names of thousands of offshore companies and other financial data of the rich and powerful is spurring renewed calls to counter corruption and tax evasion.

Japan’s government spokesman said Tuesday that Tokyo plans to propose an action plan for combating graft at the summit of the Group of Seven rich industrial economies that will be held later this month in Ise, Japan.

That follows various moves by other countries to investigate or tighten oversight of such financial dealings following the first release last month of information from what has been dubbed the “Panama Papers.”

D.S. Malik, a spokesman for India’s finance ministry, said Tuesday that India’s income tax authorities have sent notices to all the Indians listed in the database and would investigate each case based on their replies.

The International Consortium of Investigative Journalists made the fresh data on 200,000 entities available on its website at 1800 GMT (2 p.m. EDT) Monday.

The database contains basic corporate information about companies, trusts and foundations set up in 21 jurisdictions, including Hong Kong and the U.S. state of Nevada. The data was obtained from Panamanian law firm Mossack Fonseca, which said it was hacked.

Users can search the data and see the networks involving the offshore companies, including, where available, Mossack Fonseca’s internal records of the true owners.

The ICIJ said it put the information online “in the public interest,” noting that a mention on the list does not imply wrongdoing. The database omits information and documents on bank accounts, phone numbers and emails.

Mossack Fonseca said last week it had sent a cease-and-desist letter to the ICIJ urging the organization not to publish the database, on the grounds it was “based on the theft of confidential information.”

Shell companies are often used for legitimate purposes. But they also can be employed to evade taxes or to launder earnings from bribery, embezzlement and other illicit activity. The Group of 20 most powerful economies has agreed that individual governments should make sure authorities can tell who really owns legally registered companies, but implementation in national law has lagged.

The database has revealed how some tiny countries in the South Pacific have been favored as places to set up offshore trusts.

More than 13,000 offshore companies and trusts were set up in Samoa, population 200,000, and nearly 10,000 in Niue, which has a population of just 1,200, it says. Some of the trusts listed are no longer operational.

There are also more than 500 entities listed under the jurisdiction of the Cook Islands, population 10,000, and more than 600 in Singapore, population 5.7 million.

The list for Hong Kong includes 51,295 offshore entities.

The initial release of the data cache, first leaked to Germany’s Sueddeutsche Zeitung daily, showed offshore holdings of 12 current and former world leaders. Sueddeutsche Zeitung says it was given the information by an anonymous source.

Yoshihide Suga, Japan’s chief Cabinet secretary, said Tuesday that as host of the May 26-27 G7 summit, Japan hopes to include proposals for combating tax evasion, such as increasing disclosure requirements, in an attachment to the leaders’ joint declaration at the event’s close.

Ecuador’s attorney general, Galo Chiriboga, said Monday he planned to propose a joint investigation into possible wrongdoing when he meets with his Panamanian counterpart later this month.

Ecuadorians named in the leak include the attorney general, a former president of the central bank and a former member of the national intelligence service.

Panamanian President Juan Carlos Varela said his country would share information and cooperate with other jurisdictions.

In reaction to the Panama Papers, New Zealand’s government last month appointed a tax expert to review its disclosure rules for foreign trusts and says it’s open to considering changes.

Reports based on the documents released in April quickly led to the resignation of Iceland’s Prime Minister David Gunnlaugson after it was revealed he and his wife had set up a company in the British Virgin Islands that had holdings in Iceland’s failed banks. British Prime Minister David Cameron, who had campaigned for financial transparency, faced questions about shares he once held in an offshore trust set up by his father. The ICIJ reported that associates of Russian President Vladimir Putin moved some $2 billion through such companies. Putin’s spokesman dismissed the report.

Citing reporting credited to consortium partners McClatchy Newspapers, the Portland Business Journal and Fusion Investigates, the ICIJ said Monday that Mossack Fonseca had files on dozens of Americans who have faced accusations of civil or criminal financial misconduct.

The high volume of dealings – the firm set up more than 100,000 offshore entities, such as trusts and shell companies, between 2005 and 2015 – may have made it difficult for Mossak Fonseca to keep track of all its clients’ backgrounds and activities, the ICIJ’s report said.

According to public records, among those who set up offshore companies was a financier sentenced in 2002 to prison for fraud. The firm also set up a company for six Americans who later were sued for running a Ponzi scheme, a type of financial fraud in which new money is used to pay off earlier investors until the scheme collapses.

The Associated Press

300 Economists Urge Leaders to Reject Tax Havens

A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm in Panama City, Sunday, April 3, 2016. German daily Sueddeutsche Zeitung says it has obtained a vast trove of documents detailing the offshore financial dealings of the rich and famous. The International Consortium of Investigative Journalism says the latest trove contains includes nearly 40 years of data from the Panama-based law firm, Mossack Fonseca. The company didn't immediately respond to a request for comment. (AP Photo/Arnulfo Franco)

The Arango Orillac Building lists the Mossack Fonseca law firm in Panama City. (AP Photo/Arnulfo Franco)

LONDON – Hundreds of economists are urging world leaders to end the era of tax havens, arguing they only benefit rich individuals and multinational corporations and serve to increase inequality.

The 300 economists, in a letter coordinated by activist group Oxfam, say poorer countries are hit hardest by tax dodging. The signatories , including Jeffrey Sachs of Columbia University’s Earth Institute, argue there is no economic justification for tax havens and urge leaders to “lift the veil of secrecy” surrounding them.

The letter released Monday comes days before an anti-corruption summit in London, featuring politicians from 40 countries as well as representatives from the World Bank and IMF.

Many of the companies that featured in the leak of the so-called Panama Papers were incorporated in British Overseas Territories and the British Virgin Islands.

The Associated Press

German Paper Publishes ‘Manifesto’ from Panama Leak Source

FILE - In this April 4, 2016 file photo, a marquee on a building in Panama City, Panama, lists the Mossack Fonseca law firm, one of the leaders in setting up offshore bank accounts for the rich and powerful. Offshore accounts conjure up images of malicious misdeeds, but many people use them for more than just hiding bribes and laundering money. And offshore accounts can be a financial tool for more than just the ultra-wealthy, too. (AP Photo/Arnulfo Franco, File)

A marquee on a building in Panama City lists the Mossack Fonseca law firm. (AP Photo/Arnulfo Franco, File)

BERLIN – A German newspaper that obtained leaked files from a Panamanian law firm detailing offshore financial dealings published Friday what it said is a manifesto from its anonymous source, who described having been moved to act by “the scale of the injustices” the documents show.

The daily Sueddeutsche Zeitung was offered the leaked data over a year ago through an encrypted channel by the source, and started publishing material last month along with other outlets it shared the information with. It said it has now received a manifesto from its source, the self-described “John Doe,” though it didn’t specify how and when. It couldn’t immediately be reached for further details.

The repercussions of the leaked documents from law firm Mossack Fonseca have been far-ranging. The uproar led to the resignation of the prime minister of Iceland, and brought scrutiny to, among others, the leaders of Argentina and Ukraine, Chinese politicians, Russian President Vladimir Putin and his friends.

The piece published Friday says the papers “show beyond a shadow of a doubt that although shell companies are not illegal by definition, they are used to carry out a wide array of serious crimes that go beyond evading taxes.”

Its author writes: “I decided to expose Mossack Fonseca because I thought its founders, employees and clients should have to answer for their roles in these crimes, only some of which have come to light thus far.”

The manifesto says

The Associated Press