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Panamanian President Proposes Review of Financial Practices

  • VOA News

With a bust of Latin America's independence hero Simon Bolivar in the background, Panama's President Juan Carlos Varela gives a televised statement to the nation, in Panama City, Wednesday, April 6, 2016.

With a bust of Latin America's independence hero Simon Bolivar in the background, Panama's President Juan Carlos Varela gives a televised statement to the nation, in Panama City, Wednesday, April 6, 2016.

Panamanian President Juan Carlos Varela says the Panamanian government will create an independent commission to review the country's financial practices in the wake of the Panama Papers scandal.

Varela said in a brief televised statement Wednesday that the commission will contain "domestic and international experts" to evaluate the country's current practices and propose measures to strengthen transparency of financial and legal systems. Varela said Panama will share those recommendations with other countries so joint action can be taken to boost the the overall transparency of the economic sector.

Meanwhile, France has added Panama to its "grey list" of world tax havens and is pushing for the international Organization for Economic Cooperation and Development to do the same.

OECD Secretary-General Angel Gurria says the Panama Papers leak has shown the country's economic sector tolerates a "culture of secrecy" and called it the last major jurisdiction allowing clients to hide money from legal authorities.

The Panamanian law firm implicated in the scandal, Mossack Fonseca, says the 11.5 million documents leaked from its offices this week about the offshore bank accounts of the world's powerful, rich and famous were stolen by hackers, not divulged by an insider.

Ramon Fonseca, one of the founders of the Mossack Fonseca firm, said Tuesday that the hacking was carried out from overseas, but did not say what country.

"We have a theory and are following it," he said.
Fonseca said his firm, which has set up about 250,000 offshore companies over the last four decades, has lodged a complaint about the leak of the documents with Panamanian prosecutors.

The disclosures about the creation of the offshore accounts have forced several world leaders to defend their investments and say whether they have paid taxes on their profits. Creation of the offshore companies is not illegal, but the accounts have often been used to hide wealth and dodge taxes.

People demonstrate against Iceland's Prime Minister Sigmundur Gunnlaugsson in Reykjavik, Iceland on April 4, 2016 after a leak of documents by so-called Panama Papers stoked anger over his wife owning a tax haven-based company.

People demonstrate against Iceland's Prime Minister Sigmundur Gunnlaugsson in Reykjavik, Iceland on April 4, 2016 after a leak of documents by so-called Panama Papers stoked anger over his wife owning a tax haven-based company.

Iceland Prime Minister Sigmundur David Gunnlaugsson became the first casualty of the leaks, stepping down after the documents showed that his wife, Anna Sigurlaug Palsdottir, owns a company in the British Virgin Islands that has $4 million in claims against Iceland's collapsed banks, debts that he is helping the government settle.

But after Tuesday's announcement, Gunnlaugsson backtracked and said he is merely stepping aside for an unspecified amount of time. His deputy is expected to take over his duties, leaving the Iceland's political future unclear.

The scandal has touched the rich and powerful in a long list of nations, including Britain's Prime Minister David Cameron, Russia's President Vladimir Putin, Ukrainian President Petro Poroshenko, and French nationalist leader Marine LePen. Officials in the world football league FIFA and powerful members of the world entertainment industry have also been found to have links to the firm, although few have been specifically accused of wrongdoing.

Ramon Fonseca has dismissed concerns about the information in the leaked documents, saying, "The only crime that has been proven is the hack. No one is talking about that. That is the story."

He added, "We don't understand. The world is already accepting that privacy is not a human right."

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