In the documents of Panamanian law firm Mossack Fonseca featured more than 500 banks, their subsidiaries and divisions, found journalists from the International consortium of investigative journalists (ICIJ). These financial institutions could act as intermediaries in registration of 15.6 thousand offshore companies, mostly in the 1990-ies.
Among the credit institutions involved in the offshore scandal, was a British HSBC and its units — they could participate in the registration of more than 2.3 thousand of companies in offshore, Credit Suisse, perhaps providing offshore 1105, French Societe Generale (979), the canadian Royal Bank of Canada (378).
After the publication of “the Panama archive” regulators in almost all countries, whose banks were involved in the investigation, has said it is ready to begin.
The materials of the investigation show that Mossack Fonseca have established special relationships with a number of large banks, among which Swiss UBS and Credit Suisse, those of Societe Generale and HSBC. All they had allegedly made about the Panama offshore Registrar agreement, which was facilitated for them the requirement to provide data about their customers.
Usually Mossack Fonseca demanded information from banks, in which was verified the identity of the owner of the offshore company and would have confirmed that he was not involved in criminal activity. However, with UBS, for example, in 2010, according to ICIJ, an agreement was signed allowing the Bank to provide the documents, dubbed the DD light: from the Bank was not required to explain why his client decided to use an offshore company and account holders actually started to work directly with Mossack Fonseca.
In the end, emphasizes the ICIJ, the owners of some offshore companies that were created by clients of the banks through Mossack Fonseca, could be accused of criminal offences. So, among the clients of UBS, who have registered offshore companies, was sentenced in Brazil for corruption, financier Roberto Videira brandão and the suspect in the U.S. of money laundering and involvement in drug cartels Venezuelan banker Marco Tulio Henriquez. HSBC had an account the company cousin of Syrian President Bashar al-Assad, Rami Makhlouf, came under American and European sanctions.
In UBS, HSBC and Societe Generale to requests not answered. To receive comments in the Credit Suisse and Royal Bank of Canada failed.
“Good news” for Paris
In France, the reaction began almost immediately after the publication of the investigation: President Francois Hollande has called the investigation “good news” for the French, and the next day Finance Minister Michel Sapena was caused by frédéric Oudéa, head of société générale.
Meeting, I’m sure the radio station FranceInfo, “was supposed to be hard”. “I demanded that I was informed, as is the situation [the offshore] is now and how it has evolved over the 2012-2015 period, what were the reasons for opening new offshore accounts,” Sapin said on Wednesday France 1 TV channel.
The Minister threatened to Societe Generale by check on the eve of the meeting: the regulator ACPR can spend “a certain number of investigations, both in France and in Luxembourg”. About possible sanctions against the Bank said on Tuesday the Secretary of state for the budget Christian Eckert.
According to the ICIJ partner, the newspaper Le Monde, through the Bank operates 979 offshore, two-thirds of them worked with the Luxembourg branch of the Bank SG Bank and Trust Luxembourg.
Vienna and Bern cook check
About preparing the checks stated by the government of Austria: “the Panama archive” featured two Austrian Bank Raiffeisen Bank International and Hypo Vorarlberg. Austrian financial regulator FMA on Thursday said he will check on these credit institutions combat money laundering.
According to Austrian TV channel ORF and the newspaper Der Falter, attracted to the ICIJ investigation, Raiffeisen issued owned by Ukrainian President Petro Poroshenko confectionary concern Roshen loan of $115 million, secured by assets based in the British virgin Islands company Linquist Holdings Limited.
The Raiffeisen and Hypo Vorarlberg to requests not answered.
The Austrian newspaper Der Standard reminds that the financial regulator FMA in 2012 were interested in the relationship Bank Hypo Vorarlberg with offshore companies. We are talking about one out of 20 mentioned in the ICIJ investigation into companies associated with the Bank are registered in the British virgin Islands Southport Management Services, which was suspected of money laundering. In July 2015, expanding the sanctions list against Russian individuals and companies, the U.S. Treasury announced that Southport Management Services can be owned by Russian businessman Gennady Timchenko. Check the Austrian regulator in the beginning of 2013 was completed for lack of evidence.
The neighboring Switzerland regulator FINMA said on the preparation of the preliminary investigation on Sunday: the controller is going to know whether banks took all necessary steps to ensure that their clients do not involve criminal activity.
Berlin is slow
Although the investigation ICIJ included 14 medium and large German banks (including Deutsche Bank, Berenberg Bank and Commerzbank), which directly collaborated with Mossack Fonseca in the creation of offshore companies, in Germany the financial authorities has not yet announced total inspections in the banking sector.
Of them in the lead Commerzbank: 101 the company was established through its head office, 333 — via the “granddaughter” of the Corporation, Dresdner Bank Lateinamerika (Latin American business of Dresdner Bank, part of the Commerzbank). The last mention of the Bank in the documents Mossack Fonseca relates to 2015, while in 2008, Commerzbank announced the tightening of its policy in respect of offshore companies, said Die Berliner Zeitung.
On Tuesday, the sources Die Frankfurter Allgemeine Zeitung in financial circles and the sources Der Spiegel in power have confirmed that the financial regulator Germany BaFin seriously concerned about the scandal and is considering conducting similar audits in the near future.
Banks deny the crime
Almost immediately after the publication of the ICIJ investigation banks hastened to assure that they are fighting money laundering and the offshore companies that were registered through their mediation, not involved in illegal activity.
Credit Suisse, HSBC and Societe Generale said that in recent years tightened requirements for clients and almost stopped working with offshore companies. As announced in the press release Credit Suisse, in 2013, the Bank launched a program under which provision of banking services to individuals was to provide evidence of tax compliance.
Societe Generale, in its report indicated that most serviced them offshore has been closed and the Bank is only dealing with a few dozen registered through Mossack Fonseca legal entities, all of which “are managed as a completely transparent structure.”
At the same insists the British HSBC. “All the allegations are history, in some cases, we are talking about events of 20 years ago, it all happened before the adoption of the changes in the rules of the Bank a few years ago,” said the spokesman Gareth Hewett, HSBC.
UBS and the oldest Bank in Germany Berenberg Bank insist that they conduct a thorough background check clients working with offshore companies. UBS in a press release claims to know the identity of all owners of all companies with whom I worked, and also indicates that the Bank has “strict rules on combating money laundering”.
Berenberg Bank has acknowledged that, through its Swiss subsidiary, he managed the assets of several offshore firms (journalists counted 13 such companies). In this case, emphasized the representative of Berenberg, the Bank always checked final beneficiaries, the situation of companies and all associated transactions.
The representative of Raiffeisen said the Austrian newspaper Trend that the Bank fully carries out the necessary checks: at the conclusion of the contract, and in further work with the client. “However, the Bank is not an Executive body, therefore, a comprehensive screening of clients and transactions is impossible for us”, says Raiffeisen. By itself, the offshore activity is not prohibited and does not mean automatic money laundering, the Bank emphasizes, noting that he is ready to cooperate with the investigation in case of suspicion of illegal activity.
If investigators or national financial regulators prove that the banks helped their clients to use offshore financial centres for criminal purposes (e.g. for tax evasion), credit institutions threaten huge penalties.
Some banks appearing in the files Mossack Fonseca, had already survived similar scandals. In 2009, UBS paid U.S. authorities $780 million on account of settlement of charges of aiding in the concealment of funds of U.S. citizens to accounts in Switzerland. In 2014, the Bank paid another $341 million to settle similar charges from the German state of North Rhine — Westphalia.
HSBC has already appeared in the scandal center in 2015 — then journalists ICIJ gained access to data on 20 thousand offshore companies, passed in 2008, the French authorities one of the programmers of the Swiss division of the Bank. The database, which went to the tax authorities of the European Union, allowed the tracking of hundreds of criminal schemes. Thanks to her, Spain was fined €299 million, founder of the Bank of Santander Emilio Botin, and in Britain for harboring tax – ₤15 million was arrested Arlette Ricci, the heiress of the fashion House Nina Ricci. The leakage has gone down in history as SwissLeaks, while HSBC itself from the financial scandal was not damaged, although the investigation against him was initiated at least in Belgium and France.
With Germany’s Commerzbank associated one of the first references of the company Mossack Fonseca in a criminal manner. In February 2015 German prosecutors have raided the headquarters of the Bank, suspecting its Luxembourg subsidiary Cisal assistance in tax evasion. Searches were held a few months after the Leak, another publication ICIJ data about the major corporations use Luxembourg as a tax haven.
As he wrote then Die Süddeutsche Zeitung, partner Cisal were “certain Panamanian firm Mossack Fonseca, the current worldwide provider of offshore companies”. In this scheme, Cisal was an intermediary: through Commerzbank customers could buy from Mossack Fonseca-day companies. In December 2015 Cisal paid the Prosecutor’s office of Germany €17 million fine, a few days later, Commerzbank agreed to sell this company to the Swiss Bank Julius Bär for €68 million, the Deal should be closed in the summer of 2016.