Anti-Corruption Summit focuses on beneficial ownership information in wake of Panama Papers

The Panama City-based law firm Mossack Fonseca has been the subject of a leak of a massive trove of documents, which have been dubbed "The Panama Papers," containing the offshore financial dealings of dozens of people, including public figures, around the world. - Photo: AP

The massive leak of 11.5 million documents from Panamanian law firm Mossack Fonseca has renewed world attention on tax havens, offshore companies and beneficial ownership.

The data was made public Monday as Premier Alden McLaughlin, Financial Services Minister Wayne Panton and other officials are in London to attend the Anti-Corruption Summit hosted by U.K. Prime Minister David Cameron that could lead to automatically sharing information about the owners of trusts and companies.

Mr. McLaughlin, speaking shortly after the Panama Papers became public last month, emphasized, “Cayman is not Panama.”

In a number of public appearances and in the Legislative Assembly, the premier has stressed that Cayman’s financial services industry is not in the business of helping people hide money and avoid taxes.

“If there is bad business here, they would be well advised to migrate somewhere else,” he said at a recent press conference.

The new public release from the Panama Papers leak came to light just as Cayman’s Financial Services Ministry, along with officials from other British Overseas Territories, were finalizing new agreements with the U.K. on how to share beneficial ownership information with overseas tax authorities.

A month ago, Premier McLaughlin and Minister Panton announced that they had finalized a deal with the U.K. for a centralized platform that would keep beneficial ownership information with the financial services firms.

The platform would give the Cayman Islands government the ability to access that data when it gets a request from overseas law enforcement or tax authorities without keeping it on government servers. That deal is now in question.

Addressing the Legislative Assembly last week, Mr. McLaughlin said, “The [beneficial ownership] agreement we have with the U.K., the U.K. government is satisfied with …. But what has transpired is the other European Union countries … are pressing for a new global standard with respect to the automatic exchange of beneficial ownership information.”

If the deal for the automatic exchange of ownership information becomes a “truly global standard,” the premier said, the Cayman Islands would agree to it.

“The discussion has moved well beyond the discussion of a central registry,” he said.

The premier, Mr. Panton and George Town MLA Roy McTaggart will join representatives from almost 50 countries at the summit in London on Thursday.

Prime Minister Cameron said in a statement that corruption is “an enemy of progress and the root of so many of the world’s problems. It destroys jobs and holds back economic growth, traps the poorest in desperate poverty and undermines our security by pushing people towards extremist groups.”

The goal of the summit is to agree on a set of measures to deal with “corporate secrecy, government transparency, the enforcement of international anti-corruption laws, and the strengthening of international institutions,” according to summit organizers.

The Panama Papers revelations prompted renewed calls from the United States, the United Kingdom and others to make beneficial ownership information public, especially in such jurisdictions as the Cayman Islands and the British Virgin Islands.

On Tuesday, Japan’s government spokesman said 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.

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 leak led to the resignation of Iceland’s prime minister, accused of hiding money in offshore holdings. A minister in Spain also resigned because of his connections to offshore holdings found in the leaked documents, and the Pakistani prime minister and Prime Minister Cameron have also been put on the defensive because of connections with offshore holdings.

The Associated Press contributed to this report.

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