"However, jurisdictions such as Delaware, Nevada and others located in the United States, where virtually no due diligence is required... incorporations are thriving!" Mossack said. "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 Was Mossack''s letter, written from detention, was dated April 10. Panama''s chief prosecutor, Kenia Porcell, said his office was co-operating 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.
Copyright Agence France-Presse, 2017