Global Money Laundering Part II
The Anti-Money Laundering Act of 2020, Beneficial Ownership and Panama Papers
The FinCEN files has quickly swelled into a news story globally with new revelations coming thick and fast — with everyone from Michael Flynn to the Tokyo Olympics now caught up in the scandal. But the FinCEN files — while rich in information — pale in comparison with the 2016 Panama Papers leaks. The Panama Papers involved the leaking of 2.6 terabytes (that’s 2600 gigabytes) of files from the servers of Panamanian company Mossack Fonsenca, the world’s fourth largest offshore law firm (at the time).
An offshore law firm is a multi-jurisdictional law firm which typically specializes in the laws of offshore financial centers like the British Virgin Islands, Cayman Islands and Luxembourg, among others. Mossack Fonsenca, at the time of the leaks, had 600 people working across 42 countries and had acted on behalf of more than 300,000 companies across the world.
Graphic from The Guardian
The leaks from the Panama Papers were an order of magnitude more explosive than the FinCEN files. Some of the most shocking revelations included:
- Twelve national leaders are among 143 politicians, their families and close associates from around the world revealed to be using offshore tax havens
- A $2bn trail leads directly to Russian President Vladimir Putin. The President’s best friend Sergei Roldugin is shown to be at the centre of a scheme in which money from Russian state banks is laundered to offshore financial havens
- The families of at least eight current and former members of China’s supreme ruling body, the politburo, have been found to have hidden wealth offshore
- In the UK, six members of the House of Lords, three former Conservative MPs and dozens of donors to British political parties have had offshore assets
- One leaked memorandum from a partner of Mossack Fonseca said: “Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes”