Category Archives: Panama

Mossack Fonseca’s Panama Offices Raided by Police

Police in Panama have raided the offices of the firm at the centre of the Panama Papers revelations. Organized crime police surrounded Mossack Fonseca’s headquarters in Panama City on Tuesday while prosecutors entered the offices to search for documents. According to the attorney general’s office the aim of the operation had been to obtain documentation linked to the information published in news articles that establish the use of the firm in illicit activities.

The unprecedented leak of 11.5 million files has caused disorder around the world. There are links to 12 current or former heads of state and government in the data. More than 60 relatives and associates of heads of state and other politicians are also implicated.

The files have revealed a suspected billion-dollar money laundering ring involving close associates of Russia’s President Vladimir Putin. Also mentioned in the documents leaked are the brother-in-law of China’s President Xi Jinping, Ukraine President Petro Poroshenko, Argentina President Mauricio Macri, the father of UK Prime Minister David Cameron and three of the children of Pakistan’s Prime Minister Nawaz Sharif.

Officials in France, Germany, Austria and South Korea have begun investigations into possible malfeasance, from money laundering to tax evasion. France’s finance minister, Michel Sapin, told Parliament the government was putting Panama back on a blacklist of havens for tax evaders.

On 4 April, the president of the Chilean branch of Transparency International resigned after documents from the Panamanian law firm showed he was linked to at least five offshore companies. While he is not accused of illegal activity, the leaks called into question his post at Transparency International, an organization that seeks to monitor and root out corporate and political corruption worldwide.

On 5 April, Iceland’s Prime Minister Sigmundur Gunnlaugsson stepped down after leaked documents revealed he purchased an offshore company called Wintris in 2007 with his wife but failed to declare this as an interest when he entered parliament in 2009. He sold his 50% of Wintris to his wife for 1 dollar eight months later. A document signed by his wife in 2015 shows the company was used to invest millions of dollars which they had inherited. Gunnlaugsson is accused of concealing millions of dollars worth of family assets. Gunnlaugsson said no rules were broken and denied that he or his wife had benefited financially from his conduct.

Following the leak of information from Mossack Fonseca’s, Panama announced it would form an independent commission to review the country’s financial practises. President Juan Carlos Varela said the commission would evaluate the current practises and propose the adoption of measures to strengthen the transparency of the financial and legal systems.

The VII Summit of the Americas

On April 10-11 in Panama City, Panama, the Heads of State and Government of the Americas were gathered for the Seventh Summit of the Americas. This year the Summit was especially important as it saw the historic presence of Cuba whose President Raul Castro addressed his counterparts and held face to face talks with Barack Obama, the first Cuban leader to do so since the its expulsion from the Organization of American States in 1962 imposed by the United States.

Regional leaders have widely hailed it as a victory for left-leaning and progressive forces in the region, and particularly Venezuela and Cuba. Several issues were highlighted during the Summit such as Cuban-US relations, energy solutions, climate change, peace in Colombia, Venezuelan-US relations and Argentina’s long-standing claim of sovereignty over the Falkland Islands. During the summit, President Obama met with President Raul Castro and both said that their meeting will help their countries turn the page after decades of important hostility. It is likely that both countries will still have differences but they will advance mutual interests. President Obama said: “What we have both concluded is that we can disagree with a spirit of respect and civility. Over time, it is possible for us to turn the page and develop a new relationship between our two countries.” President Castro has called for the lifting of the US economic blockade on Cuba and the country’s removal from Washington’s list of state sponsors of terrorism. However, for the US human right in Cuba and political reform are key issues. President Obama is expected to remove Cuba from the terrorism list in the coming days, which would further demonstrate US’s commitment to improving its ties with Cuba.

However, the much anticipated rapprochement between the US and Cuba was quite upstaged by regional leaders’ rejection of President Obama’s March 9 Executive Order that labelled Venezuela a “national security threat”, which has been condemned by 33 nations and other regional bodies. While positively noting the steps taken by President Obama to re-establish bilateral ties with Cuba, President Castro nonetheless criticized President Obama for his aggressive measures against Venezuela. The US also imposed sanctions on 7 Venezuelan top officials last month it accuses of human rights violations. A potentially tense moment of the Summit was avoided when President Maduro did not follow through on a pre-summit pledge to confront President Obama with 10 million signatures on a petition demanding the removal of the sanctions. Instead, President Maduro said the petitions would be delivered through diplomatic channels. This change of the initial strategy came after a senior US State Department official flew to Caracas to meet with Maduro, and Obama and other top officials walked back language declaring Venezuela’s political and economical instability a threat to US national security.

During the plenary sessions of the Summit, Venezuela was supported by other nations such as the presidents of Latin America’s two most populous and economically powerful nations: Brazil with President Rousseff, who only briefly criticized the US sanctions on Venezuelans as “counterproductive and inefficient”, and Mexico with President Enrique Peña Nieto, who delivered an attack-free address to the assembly. This support from other regional leaders is also characterized by their global desire of a lesser US intervention in the region and especially on political or military aspects. Bolivian President Evo Morales expressed this by saying: “We don’t want more Monroes in our continent, nor more Truman doctrine, nor more Reagan doctrine, nor more Bush doctrine. We don’t want any more presidential decrees nor more executive orders declaring us threats to their country.”

The pressure put on the United States by regional leaders on several matters is escalating and it is highly likely that this will continue in a short- to mid-term period until US intervention in internal matters does not stop. However, both the meetings between the US with Cuba and with Venezuela demonstrated that improvements in their relations are possible and that steps in order to move forward will be taken by all sides. The Summit concluded with a Declaration from President Varela delivered at the end of the event. In his speech, the Panamanian president said he convened the summit “with a universal character” and that the result was a “historic” event, through the presence, for the first time, of Cuba. He then added that “the decision announced by the presidents of Cuba and the United States to move forward with a new approach to the relations between their countries created a legitimate expectation that situations, both old and new, that have made for tense hemispheric relations can be resolved.”