Unboxing the modern “Pandora’s box” — the Pandora Papers leak

  • Financial privacy: protection from extortion (common in countries such as Mexico)
  • Legal framework: certain OFCs provide better legal and judicial facilities than an individual’s home country
  • Better banking infrastructure: in some jurisdictions such as Peru, it is a tedious process to get bank affiliation, hence they prefer setting up companies in OFCs
  • Lower tax rates: certain OFCs allow low or no capital gains tax through indirect asset transfers
  • Hiding money or not reporting earnings for purposes of tax evasion
  • Hiding ownership from law enforcement authorities, as the entity uses proceeds of crime or uses cash for financing terrorist activity, or the entity is used for laundering money
  • * The following issues are discussed in the Pandora Papers: creation of shell companies, foundations and trusts, and the use of such entities to purchase yachts, jets, real estate and life insurance; making investments and moving money between bank accounts; estate planning; avoiding taxes through complex financial schemes; and engaging in financial crime including money laundering
  • Some files date to the 1970s, but most of those reviewed were created from 1996 to 2020
  • The European Union (EU) announced plans to tighten corporate oversight, forcing companies to publicly identify their real owners and give permanent status to temporary investigative committees
  • The Australian Taxation Office started investigating 800 Australians, stating that some of the cases may be referred to the country’s Serious Financial Crime Task Force (source: link)
  • France restored Panama to its tax havens list from which it had recently been removed (source: link)
  • Clients of Mossack Fonseca were fined USD440,000 by the regulators of the British Virgin Islands for breaching counter-terrorist financing (CTF) and anti-money laundering (AML) regulations. The fine was the highest ever levied by the regulator (source: link)
  • The National Directorate of Taxes and Customs of Colombia launched an investigation of all 850 clients of Mossack Fonseca Colombia, a subsidiary of Mossack Fonseca that was established in 2009. In 2014, Colombia had placed Panama on its blacklist of tax havens (source: link)
  • Anti-money laundering obligations to be extended to private-sector intermediaries such as corporate services providers
  • Recovery of money -progress is slow, but
  • Twenty-three countries have recovered at least USD1.2bn in taxes
  • Heads of government implicated in corruption or tax avoidance have resigned or faced prosecution
  • There have been investigations in at least 82 countries
  • Supervisory and regulatory bodies to have the ability to penalise or suspend licences of businesses or professionals that do not meet AML and CTF standards
  • Compile a global registry to identify ultimate beneficial owners (UBOs) of companies
  • In addition to collaboration between global investigating agencies, a global centralised investigative agency could handle the problem more efficiently
  • Access to multiple data sources (primary and secondary)
  • Our research pedigree and expertise
  • Incorporating best practices in KYC/AML procedures implemented by industry leaders
  • Efficient due diligence life-cycle management, reducing up to 30% in operating costs
  • Faster turnaround times
  • Access to our Innovation Lab to build customised, next-gen KYC/AML solutions (e.g., access to our financial crimes compliance risk calculator and country risk matrix)
  • Anisha Shangari has 5 years of experience in compliance/anti-fraud, having previously worked for American Express. Her expertise spans across the risk and compliance sector, focusing on know your customer (KYC) and fraud management. At Acuity Knowledge Partners she is responsible for KYC/AML support to Compliance Services. Anisha has done her Masters in Mathematics from University Of Delhi.
  • Swati Gera has 5 years of experience in Anti Money Laundering (AML) Analytics and Compliance reporting, having previously worked for Infosys. Her expertise spans across the risk and compliance sector, focusing on AML and know your customer (KYC). At Acuity Knowledge Partners she is responsible for KYC/AML support to Compliance Services. Swati has done her engineering from Lingayas University, Faridabad.
  • Mansi Verma has 7 years of experience in the Financial Crimes Compliance domain. She previously worked with KPMG. Her expertise spans across the risk and compliance sector, focusing on Due Diligence and know your customer (KYC). At Acuity Knowledge Partners she is responsible for KYC/AML support to Compliance Services. Mansi has done her graduation from Shri Ram College of Commerce.

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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