Panama Leaks: Road to Black Money and Money Laundering

A series of millions of confidential documents were leaked from Mossak Fonseca, a Panama based law firm, which took whole world to surprise and shock. These leaked documents have disclosed many high profile names who through or with the help of this firm had created offshore companies in the tax haven countries and invested their money in it to save them from paying taxes in their respective countries. The set of these leaked documents explains how these powerful super rich high profile people used to hide their black money from the scrutiny of the government to set aside themselves from giving taxes.

These essential and confident documents were leaked by some anonymous sources and passed on to German newspaper Sueddeutsche Zeitung. This German newspaper shared these confident documents with the Washington based International Consortium of Investigative Journalists (ICIJ). With months of detailed investigation and analysis, ICIJ disclosed these secret financial dealings of the rich and powerful persons. This series of examination of leaked documents by ICIJ was carried out with the help and co-operation of more than 300 journalists from more than 50 countries.

The leak was disclosed after carrying detailed investigations for months. Some of the big names that have been revealed in the panama leaks are Russian President Vladimir Putin, Iceland’s President, Syrian President Basher-Al-Assad, and Argentina President Mauricio Macri, Hollywood Actor Jackie Chan, Bollywood Actress Aishwaria Rai, Amitabh Bachan, Industrialist Vinod Adani and K.P.Singh to name some few; the list includes many more high profile names.

What makes these revelations different and unique is the abundance of the information; these leaks are many times bigger than what Wikileaks released few years back.

Having a company in a tax heaven country is not a crime but what it is used for and from where does the money comes from is the main issue. Without taxes, the system would struggle to function properly as it would be difficult to provide essential public services. Iceland’s Prime Minister has resigned from his job and many other powerful persons are facing the pressure for their involvement in hiding black money in tax heavens.

These panama leaks documents provides with the details of working of these offshore companies. Mossak Fonseca registers the companies of its clients in tax heaven and these companies only exists on paper only with no office and no employees. It used to keep the identity of their client anonymous and also used to hide their fortunes in these offshore companies.

From these revelations we can say that this firm Mossak Fonseca is involved in huge money laundering business. We can’t ignore huge possibility that this black money could be used or involved in terrorist activities or to fund such illegal activities.

The success of Mossak Fonseca relied on broad network of powerful persons, accountants, lawyers and from big banks that hired it to manage the finances of their powerful and wealthy clients.

Mossak Fonsecca co founder Ramon Fonseca told that the information is fake and is full of inaccuracies and many companies cited by ICIJ are not and have never been clients of Mossak Fonsecca.

With some Indian names in this leak, Prime Minister Narendra Modi has ordered an investigation into the matter and the NDA government has announced a special multi-agency group comprising officers from investigative units of Central Board of Direct Taxes and its Foreign Tax & Tax Research Division, RBI and Financial Intelligence unit. BJP had promised during elections that it would bring back the black money deposited abroad back to India and punish all the tax defaulters. To fulfill it’s this promise, the very first step that Modi government did was that it appointed Justice M.B. Shah as head of the SIT team which would be investigating the black money issue.

Government now has a golden opportunity to fulfill its promises, the SIT must investigate the Panama Leaks and should reveal the names of tax defaulters & they should also be punished according to law.

We cannot tolerate this illegal business of black money and money laundering. Strict message should be given that no one should be spared who are involved in it, whoever it is.

The government all over the world need to co-operate and co-ordinate to bring some changes and reforms to the International economic system and to ensure more transparency in the financial dealings.

Akshay Raina