MIAMI, USA — Tax authorities in Malta have announced that the government of Panama has declined to assist them in their investigations into tax evasion initiated following information released by journalists in the Panama Papers documents leak scandal. Tax investigators from Malta have asked to see emails of the law firm of Mossack and Fonseca, which allegedly assisted Maltese nationals evade income taxes, and hide assets.
There are reportedly 55 active investigations pending in Malta as the result of data exposed in the Panama Papers. The names of two senior government officials have appeared in the press, including Keith Schembri, the chief of staff of the prime minister, and minister within the office of the prime minister, Konrad Mizzi.
The disclosures have unleashed a political firestorm within Malta, and there have been calls for the resignation of both officials; and one had to endure an internal vote on a no-confidence motion.
Apparently, the opaque scheme was extremely well constructed, with offshore corporations controlled by New Zealand trusts, and both Maltese officials failed to notify their local tax authorities of these trusts, which is a violation of the law.
The appearance of the names of government officials in the Panama Papers has shaken the public’s perception that its officials were free from corruption, as there exists a strong presumption that these non-transparent corporations were formed to hide bribes and kickbacks.
More importantly, the total and complete lack of cooperation on the part of the Panamanian authorities is a telling sign that Panama intends to keep its financial secrets close at hand, lest it lose out on the lucrative business of banking the criminal proceeds of corrupt politically exposed persons.
Kenneth Rijock is a banking lawyer turned-career money launderer (10 years), turned-compliance officer specialising in enhanced due diligence, and a financial crime consultant who publishes a Financial Crime Blog. The Laundry Man, his autobiography, was published in the UK on 5 July 2012.
