Panama Papers: British banks ordered to divulge details of their dealings with Mossack Fonseca law firm
Leaked documents reveal how more than 500 banks worldwide were responsible for registering nearly 15,600 offshore companies offering anonymity to their beneficial owners
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British banks and finance houses have been given until next week to hand over details of any dealings with the law firm at the centre of the Panama Papers leak.
The City regulator has contacted about 20 firms, including several major banks, to provide all information they hold on their involvement with Mossack Fonseca, the Panama-based company whose files detailing the owners of more than 200,000 offshore companies were released this weekend.
The Financial Conduct Authority (FCA), which has made tackling money laundering and financial crime one of its priorities, said it wanted to receive the data by no later than 15 April.
The cache of 11.5 million Mossack Fonseca documents reveals how more than 500 banks worldwide were responsible for registering nearly 15,600 offshore companies offering anonymity to their beneficial owners.
Such structures make it difficult for tax authorities to track money flows and are often used for legal tax avoidance purposes. They are also tools in illegal tax evasion schemes, though Mossack Fonseca has insisted that it acts “beyond reproach” and has never been accused of criminal wrongdoing in its 40-year existence.
The papers name several UK-based banks, or those with large UK operations, including HSBC, Credit Suisse and Coutts Trustees, owned by the Royal Bank of Scotland. All insist that they do not help clients to avoid tax.
The FCA will be looking for any evidence of British institutions facilitating tax avoidance or infringing anti-money laundering rules using complex offshore structures.
In a statement, the financial watchdog said: “The FCA has written to a number of firms about this issue, including those on our anti-money laundering programme, and we are working closely with a number of other agencies which are also looking at this.
“As part of our responsibility to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime.”
Money laundering and financial crime is one of seven priority areas declared by the FCA this week in its annual business plan. The regulator warned that if it found weaknesses in the money laundering controls of companies, it would send a “deterrent message” using its enforcement powers. It also has the option of referring cases to law enforcement agencies, including the Serious Fraud Office.
The plan states: “It is imperative that the UK financial system has appropriate safeguards to prevent financial crime.”
The Panama documents have highlighted several areas of potential investigation for financial watchdogs around the world, including the alleged provision of services to companies subject to international sanctions. Authorities in Switzerland, France, Australia and Austria have already said they are investigating information arising from the documents.