Iceland's PM resigns over Panama papers

[Confounding]

The people have spoken.

Prime Minister Resigns - The Reykjavik Grapevine

Sigmundur Davíð Gunnlaugsson will resign as Prime Minister of Iceland. Minister of Agriculture and Fishing Sigurður Ingi Jóhannsson told RÚV just moments ago that Sigmundur has resigned as the Prime Minister. This move still needs the approval of the Independence Party, and the President, before being official.

 

[Confounding]

I meant to post this is Global Discussions.

 

[Iceweasel]

I saw a video clip of the reporter asking him what he knew about a company and he got up and walked out. So this isn't surprising.

 

[waltky]

Cat's outta the bag now...

Politicians, celebs in spotlight over offshore accounts
Apr 6,`16 -- The fallout from a massive leak of records on offshore accounts dragged a growing number of leaders and celebrities into the spotlight Wednesday, with a Bollywood actor, a race car driver and Ukraine's president among those denying they evaded taxes.

The reports center on millions of documents detailing how the rich and powerful use shell companies in low-tax states like Panama or the Cayman Islands, sometimes giving them fanciful names like "Goldfinger" or "SkyFall." The suspicion that such accounts are used to skirt taxes prompted a rush of denials, statements and, in some cases, media blackouts. Ukrainian President Petro Poroshenko was the latest high-profile politician to face scrutiny over the issue, denying he had meant to evade taxes by putting his candy company offshore. Poroshenko had promised voters he would sell his business when he ran for office in 2014. But according to the reports, he merely moved it secretively offshore.

Ukrainian President Petro Poroshenko speaks during a press conference at the Japan National Press Club in Tokyo, Wednesday, April 6, 2016. Poroshenko said at a news conference in Tokyo on Wednesday that an offshore holding company set up for his candy business was a necessary step to put his assets into a blind trust when he became president in 2014​

On Wednesday, he said he had done nothing illegal when he created the offshore holding company to put his business in a blind trust when he became president. "This is absolutely normal procedure," Poroshenko said during a visit to Tokyo. "If we have anything to be investigated, I am happy to do that. But this is absolutely transparent from the very beginning. No hidden account, no associated management, no nothing."

Ukrainian opposition groups maintained the move could have cost the war-torn country millions of dollars in desperately needed tax revenues. But analysts said the Ukrainian leader does not appear to have broken the law - just suffered a blow to his image. "You can believe the explanations of Poroshenko or not believe them, but from a formal point of view, he did not violate the law," said Volodymyr Fesenko of the Penta think-tank in Kiev.

The data leaked from the Panama-based law firm Mossack Fonseca was reported on this week by an international group of media companies with the coordination of the Washington-based International Consortium of Investigative Journalists. The leak has revived a global debate over the use of offshore accounts and companies.

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[waltky]

Granny says it's a place to put her Halliburton an' Chinese rickshaw stocks...

What Is a Tax Haven?
April 08, 2016 - The International Consortium of Investigative Journalist's team, working with more than 11.5 million leaked documents from a Panamanian law firm, published some of its findings earlier this week into the offshore financial dealings of the rich and famous.

The ICIJ analysis of the documents, known as the Panama Papers, showed the firm Mossack Fonseca helped thousands of individuals and companies from around the world set up shell companies and offshore accounts in low-tax havens. Such accounts are a favored tool to evade taxes, launder money or pay bribes, though they also have legitimate uses.

What is a tax haven: A country or jurisdiction that offers foreign individuals and businesses little or no tax liability. Also known as secrecy jurisdiction or offshore haven.

Other characteristics of a tax haven:

* Laws that encourage financial secrecy and inhibit free exchange of information to foreign taxing officials.
* Lack of transparency in legal and administrative dealings.
* Lack of a requirement that a person live in or a business operate out of a country in order to benefit from its tax policies.

Why do people use tax havens: Individuals and businesses can take advantage of a foreign country's tax policies to avoid paying taxes in their home country.

What does offshore mean: To register or operate outside a person's or business' national boundary. The arrangement is often done for the purpose of financial, legal and taxation benefits.

What is an offshore company: A company incorporated for the purpose of operating outside the country of its registration. Also known as a shell company.

Legal vs. illegal:

See also:

Revelations Show How Neediest Nations Are Harmed
April 08, 2016

The Panama Papers — documents leaked from a Panamanian law firm — reveal a shady side to the global financial system, in which the world’s elite routinely hide money to remain anonymous or to avoid paying taxes. While some argue there’s nothing illegal about the practice, others say the lack of transparency and controls in many tax haven countries comes with a heavy price tag, especially in countries where development money is needed most. VOA's Mil Arcega reports.

Panama Tax Haven Revelations Show How Neediest Nations Are Harmed

 

[waltky]

Makin' tax evasion legal here...

New Treasury rule could make it easier to hide money in the US, critics say
Saturday 9th April, 2016 - In wake of Panama Papers revelations, US Treasury is re-examining its policies on shell companies but experts say rule is too broad to discourage tax avoidance

The US Treasury is re-examining its policies regarding shell companies, which can serve as tax havens for the rich, in the wake of the leak of 11.5m documents from the Panama-based law firm Mossack Fonseca. Experts, however, are worried that instead of limiting the ability to hide wealth, one rule under review could actually enhance it. At the moment, firms like Mossack Fonseca can provide their clients with officers and shareholders for their shell companies. These officers – while serving as owners in name only – are likely to appear on the paperwork collected by US financial institutions, hiding the true owners who benefit from the company’s existence.

The beneficial ownership portion of the rule, as proposed by the US Treasury in 2014, is too broad and is easy to circumnavigate, say critics including the International Monetary Fund. On Tuesday, two days after the first batch of Panama Papers revelations had been published, Obama took the stage in the White House briefing room and described tax avoidance as a “big global problem” that is “not unique to other countries”. “A lot of it’s legal but that’s exactly the problem,” he said. “It’s not that they are breaking the law, it’s that the laws are so poorly designed that they allow people – if they’ve got enough lawyers and accountants – to wiggle out of responsibilities that ordinary citizens have to abide by.”

By Wednesday, the Treasury let it be known it would soon release a rule that would require banks to obtain the names of people at the helm of shell companies seeking to open accounts with them. The problem? Experts say it’s another one of those “poorly designed” laws that Obama spoke of. And this time it’s being implemented by the Obama administration itself. Last summer, after evaluators from the International Monetary Fund reviewed the proposed rule, they said it did not comply with recommendations laid out by the Financial Action Task Force, of which the US is a member. “The evaluators found that the United States’ compliance with the two recommendations dealing with the transparency of legal persons and arrangements was very weak and rated both as non-compliant,” according to the IMF report.

The rule, which is years in the making, would require companies to disclose c-suite officers such as CEOs, chief financial officers and presidents. (Such officers have in the past been provided by firms such as Mossack Fonseca.) The rule would also require companies to disclose shareholders who have 25% or more equity interest in the company, which critics say is too high a threshold. “Specifying a disclosure threshold is generally an ineffective approach, since it simply invites wrongdoers to arrange their affairs to come in below the specific threshold,” former Michigan senator Carl Levin, at the time chairman of the Senate’s permanent subcommittee on investigations, wrote in a letter to the Treasury in December 2014. He recommended that if the Treasury were set on having a threshold, it ought to consider one closer to 10% than 25%. “Wrongdoers can simply issue more shares of stock or identify more trust beneficiaries, using nominees, to avoid triggering financial institution oversight. Under the proposed rule as currently drafted, a criminal would have to find only five people to agree to serve as ‘equity’ owners of the relevant legal entity in order to avoid having the names of any beneficial owners included in financial institutions records.”

MORE

See also:

Forget Panama: it's easier to hide your money in the US than almost anywhere
Wednesday 6 April 2016 - The term tax haven may evoke images of exotic locales, but Panama actually ranks as the 13th most attractive spot for hiding assets, while the US lies third

One of the surprises about the Panama Papers – the largest leak from an offshore tax adviser in history – is how few Americans have so far been exposed. The reason? It may be because creating a shell company in the US is easier than obtaining a library card. About 200 people with US addresses have so far been revealed as clients of Mossack Fonseca, the firm at the center of the Panama Papers leak. Compared with countries such as China, Switzerland, Russia and the United Kingdom, the number is small.

The anomaly may be because it’s so easy to create a vehicle to hide your money and your identity in the US that there’s no need to mess with Panama, according to Shruti Shah, vice-president of programs and operations at Transparency International, an anti-corruption organization. “You don’t really have to go to Panama or other tax havens. They are not the only ones making it possible for corrupt officials and other criminals to launder their money. You can do it in every state in the US,” explained Shah. “In every state in the US, you can incorporate an LLC – [a limited liability company] – or another legal entity and you don’t have to disclose who the beneficiary on it is. In fact, Delaware is so synonymous with anonymous companies and ghost corporations that it was named in Transparency International’s Unmask the Corrupt campaign as one of the most symbolic cases of corruption.”

The term tax haven usually evokes an image of some faraway place like Belize or the Cayman Islands. Yet in 2015, in a ranking of tax havens most attractive for those looking to hide assets, the US came in third – surpassing Cayman and Singapore. The two places that were even better suited as tax havens for the rich were Switzerland and Hong Kong, according to the Tax Justice Network that published the ranking. What was Panama’s ranking? It was 10 spots behind the US, at 13.

Welcome to Delaware

A while back, Shah sent her husband to return an overdue book she had borrowed from the library. When he returned, he told her her library card was expired and that to renew it she would have to bring her driver’s license showing her current address or a utility bill with her address. “If I were to open a shell company, I wouldn’t require any of those things. I would actually need less information to open a shell company in the US than I would need to get a driver’s license or a library card,” pointed out Shah.

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[Political Junky]

Can't wait till they get to the US.