Offshore Havens

Panama Leaks Spark Reform Calls

panama skyline with contrast reuters carlos jasso
Panama City has grown into an international hub for offshore finance. Thanks to a booming business providing legal but opaque shell-companies to international investors, the city has grown -- and with it the gap between rich and poor.
  • Why it matters

    Why it matters

    The German government said it would press for new legal restrictions on anonymous off-shore banking in the wake of the Panama Papers disclosures. Meanwhile, two German banks named in the report defended their actions in helping clients set up shell companies in the Central American tax haven.

  • Facts

    Facts

    • German government officials said they wanted to create a “national transparency register” that listed the true owners of offshore firms to help thwart illegal money-laundering and tax evasion.
    • Deutsche Bank and Berenberg Bank, the two German banks listed in the Panama data disclosed by a Munich newspaper, defended their customers’ offshore businesses as legal and fully monitored by authorities.
    • An unnamed former Siemens executive reportedly controlled up to €40 million in corporate money in Panamanian shell companies used to pay illegal bribes to win engineering contracts. When the bribery scandal was exposed in 2006, almost €3 million of the money in Panama was not returned to Siemens, the Panama Papers leak revealed.
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  • Audio

    Audio

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The release of the “Panama Papers” has prompted German politicians to renew calls to crack down on international tax evasion and money laundering by creating a “national transparency register” for offshore shell companies. But German banks named in the papers, including Deutsche Bank and Berenberg Bank, defended their actions. They say dealings with offshore transactions are above board and tightly monitored.

The Munich-based newspaper Süddeutsche Zeitung gained access to what it said was a trove of documents relating to a Panamanian law firm that specialized in setting up anonymous offshore financial deals. The data was shared with the International Consortium of Investigative Journalists, and media outlets worldwide published the findings on Sunday.

The information haul, which the newspaper said had been leaked by an unknown source, contains 11.5 million documents, some dating back nearly 40 years, and details the activities of 214,000 offshore firms set up in Panama.

Among the individuals named in the documents are associates of Russian president Vladimir Putin, the prime ministers of Iceland and the Ukraine, global sports stars and senior members of FIFA, soccer’s governing body.

With 2.6 terabytes of data, the leak is far larger than comparable releases by Wikileaks in 2010, or the 2014 LuxLeaks revelations about Luxembourg’s tax policy.

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