Banks and other financial firms have been told they have a week to check if they are linked to Mossack Fonseca, the law firm at the centre of the Panama Papers leaks, the UK’s Financial Conduct Authority (FCA) said today.
The FCA, UK’s financial regulator, has written to the companies on Monday after over 11 million of confidential documents have been leaked from Mossack Fonseca, a law firm based in Panama, showing how the company set up offshore investment arrangements for its clients.
“The FCA has written to a number of firms about this issue, including those on our Systematic Anti-Money Laundering Programme, and we are working closely with a number of other agencies who are also looking at this,” the FCA said in a statement.
“As part of our responsibility to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime,” it added.
More than 500 banks, their subsidiaries and branches registered nearly 15,600 shell companies with Mossack Fonseca, according to the International Consortium of Investigative Journalist (ICIJ).
Credit Suisse and HSBC, two of the world’s largest wealth managers, were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another. They have both dismissed suggestions they were actively using offshore structures to help clients avoid tax.
Tidjane Thiam, Credit Suisse CEO, said the bank doesn’t condone the use of offshore wealth-management structures for “tax avoidance or any type of nontransparent activities”.
HSBC separately said the documents pre-dated a thorough reform of its business model.
The Panama Papers were obtained by an anonymous source who contacted the German newspaper Süddeutsche Zeitung, which worked with other papers and the ICIJ to go through the data.
