Lawmakers and regulators around the world take action in the wake of Pandora Papers



US lawmakers are ready to respond to the Pandora Papers with landmark legislation that would crack down on professional enablers who move dirty money for corrupt clients.

The bipartisan measure would require a wide range of intermediaries – including lawyers, accountants, real estate professionals, trust administrators, art dealers, financial advisors and public relations professionals – to make it happen. ensure that they do not launder black market revenues.

“The disclosures in the Pandora Papers are the clearest demonstration to date of the historic threat posed by foreign corruption,” said a joint statement by US officials Tom Malinowski and John Curtis. “Billions of dollars of dirty money belonging to antagonistic actors are flooding the United States. “

Dubbed the Enablers Act, the sweeping bill was inspired by an investigation by an international consortium of investigative journalists into the secret deals and hidden assets of more than 330 politicians in more than 90 countries.

Under the bipartisan measure, which is expected to be unveiled on Friday, facilitators could be required not only to perform background checks on money flowing into their businesses, but also to report funds of suspicious origin and other activity. suspect to regulators and judicial officers.

Anti-corruption experts said the legislation, which has been in the works for at least two years, makes sense to present now, as the leaked revelations released by the ICIJ and its media partners since Sunday expose many professions that the law on facilitators are now seeking to regulate.

“The ICIJ and other investigative journalists created the policy for this critical national security measure,” said Paul Massaro, congressional anti-corruption adviser. “Global corruption is an existential threat to democracy. “

“The Pandora Papers ushered in a historic moment for a radical political response,” added Josh Rudolph, malicious finance researcher at the Alliance for Securing Democracy at the German Marshall Fund.

Pandora Papers is the largest survey of offshore finance and deeply explores a range of professions. Supporters of the bill have particularly targeted the legal profession, which they say has long been immune from scrutiny.

Rudolph and Massaro cited several examples of investigative stories from the Pandora Papers to argue for lawmakers’ passage of the Enablers Act. They understand:

UNITED STATES TAX HAVEN: Pandora Papers discovered that agents had set up nearly 30 US-based trusts in South Dakota, linked to people or companies accused of fraud, corruption or human rights violations in some of the most vulnerable communities in the world.

GREAT LAW: A Pandora Papers investigation has highlighted how America’s largest law firm, Baker McKenzie, is an architect and mainstay of the offshore shadow economy. The company worked for a US-sanctioned Russian arms dealer – and for Ukrainian oligarch Ihor Kolomoisky and Malaysian fugitive financier Jho Low, accused of helping orchestrate two of the world’s biggest suspected frauds. Baker McKenzie, who lobbies for big banks and big tech, also opposed proposals to strengthen financial regulatory oversight and tax laws.

THE KING’S REAL ESTATE EMPIRE: The Pandora Papers have shown how the world’s richest and most politically connected companies use shell companies to dodge the scrutiny of international real estate transactions. Real estate professionals have helped King Abdullah II of Jordan buy luxury homes in London, Washington, DC and Malibu with offshore companies. The deals – totaling $ 106 million – raise questions about whether realtors helped a foreign executive extract ill-gotten wealth from his country.

SWEETHEART RUSSIAN CASE: The ICIJ also showed how the facilitators helped Putin’s main image maker Konstantin Ernst acquire a covert stake in a billion dollar real estate transaction using offshore companies.

THE LOST TREASURE HUNT: The Pandora Papers revealed that shortly after US investigators linked famous art dealer Douglas Latchford to stolen Cambodian treasures, Latchford and his family created offshore trusts that held dozens of relics.

The bill is expected to be introduced by Malinowski, a Democrat from New Jersey, and Rep. Maria Salazar, a Republican from Miami. Anti-corruption experts said it would help align the United States with most other countries, which already require professional intermediaries to follow anti-money laundering protocols to detect and prevent criminals from disguising illegal funds. into legitimate income.

“Our laws require banks to report suspicious financial activity, but not other money laundering facilitators, such as law firms and art dealers,” Representative Malinowski wrote on Twitter. “It’s a loophole that kleptocrats can walk through on a yacht, so I’m presenting a bipartisan bill to close it.”

More spin-offs around the world

Meanwhile, governments and politicians in other countries have continued to respond to the Pandora Papers.

Members of the European Parliament discussed the Pandora Papers revelations in a session today with many lawmakers urging reforms to end tax evasion and other financial crimes facilitated by corporate use screens and trusts in tax havens.

“How can Europe ask its citizens to make sacrifices when two [European] country leaders and a finance minister avoid taxes? Said Rosa D’Amato, an Italian MEP. “It’s not just a tax justice issue, it’s also a social justice issue.”

A key financial regulator in Singapore has said it is reviewing reports that an offshore provider it regulates, Asiaciti Trust, has not properly vetted some of its clients, according to the Guardian.

A spokesperson for the Monetary Authority of Singapore said the regulator “does not tolerate the abuse of our financial system for illicit activities and will not hesitate to take action against FIs [financial institutions] if they do not meet these requirements.

In Sri Lanka, President Gotabaya Rajapaksa today called on the Commission to investigate allegations of bribery or corruption to investigate the Sri Lankan individuals named in the Pandora Papers, media reported local.

At the same time, Thirukumar Nadesan, the husband of former minister Nirupama Rajapaksa whose offshore transactions were exposed in the ICIJ’s investigation, called for an independent investigation of the information, according to Sri Lanka news reports. Lankan.

In a letter to the president, Nadesan expressed his preference for a retired judge to take charge of the investigation and asserted that “my wife and I are totally innocent and not guilty of any wrongdoing.”

The ICIJ reported that Bernard de Laguiche and other members of the founding family of chemical giant Solvay have displaced millions of people overseas while people living near Solvay factories in northern Italy and the New Jersey accused the company of contaminating the water supply. In Belgium, ICIJ partners Le Soir and De Tijd announced that Bernard de Laguiche had resigned from Solvay’s board of directors on September 24 and from his position as CEO of Solvac on September 27, after answering questions of the ICIJ. De Laguiche told De Tijd the resignation was “strictly for personal reasons”.

Former Hong Kong Managing Director Leung Chun-ying denounced ICIJ partner Stand News on his Facebook page, saying the investigation into his overseas transactions had “ulterior motives.” . Stand News and ICIJ discovered that in 2015, when Hong Kong’s top executive, Leung, secretly transferred his shares in a branch of a real estate company, worth more than $ 300,000. . On Wednesday, Leung, who had not responded to repeated requests for comment from the ICIJ, denied the wrongdoing and said at the time he was under no obligation to disclose details of his involvement and the agreement.

The Bulgarian anti-corruption commission has announced that it has started to analyze the makeshift declarations filed by former member of parliament Delyan Slavchev Peevski. On Tuesday, ICIJ’s media partner in Bulgaria, BIRD, published an article revealing that Peevski was linked to offshore companies not listed in the statements Bulgarian politicians are required to file.

The Bulgarian State Agency for National Security (SANS) also said that Peevski came under scrutiny in June when US authorities sanctioned him for “involvement in significant corruption” and the New data from the Pandora Papers will now also be reviewed. Peevski was interviewed by SANS on Wednesday.

Pakistani Minister of Water Resources Moonis Elahi refuse holding offshore or undeclared assets following the ICIJ report that Elahi withdrew from an investment in Singapore after learning that Pakistani tax authorities would be notified. The investigation revealed that Elahi told offshore supplier Asiaciti that he had a significant stake in RYK Mills, a sugar refinery in Punjab province. Between 2017 and 2018, his wife owned an $ 8.2million flat in London through a company registered in the UK. Neither asset appears on the declaration of assets that Elahi and his wife provided to the National Assembly of Pakistan in 2017.


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