The management offices Mossack Fonseca & amp; Co. -located in the financial heart of the city of Panama appears in thousands of companies, which also include the names of employees working for the firm as officers of those corporations, registered in more than a dozen jurisdictions around the world, including, Panama.
at the headquarters building, which is accessed prior identification which includes scanning and archiving identification of visitors -. two executives of the firm gave a tour La Prensa , showing the various departments and subsidiaries of the firm
the tour included the departments due diligence (due diligence), information technology, human resources, hospitality as well as the core business of the firm, called “Collection”, where the “factory is located “companies, according to the description provided the director of Legal Affairs of the firm, Sara Montenegro , companies that are then sold far -a letter- or all the world
Upon reaching the conference room, an executive -. Josette Roquebert – I expected to explain how they exemplar in hand the due diligence of your customers or potential customers. The slides showed their computer verification tools: databases Secret Service US, FBI, DEA, Interpol, Worldchk, Google and specialized lists designed to meet the requirement “ know your client “.
the firm also requires clients to sign a contract in which, according Montenegro, this is obliged to” let us know when you have an investigation current or [...] in any legal situation that threatens your business “ p class =>. “in fact, contracts are drawn up taking the requirements of the anti-money laundering laws and due diligence in the countries where we work …. have you had clients who have reported being investigated? What the firm does Sara Montenegro (SM): Usually, we work a lot with professional customers. I at least I’ve been 11 years working in Mossack Fonseca’ve never had any. However, we do notify us when a customer of it [professional customer] is having a problem … What you are a professional client? Montenegro explained that the figure of “professional client” is an intermediary, “referred to in all laws, including that of Panama”. These intermediaries, in the case of Mossack Fonseca said, are banks, trust, law firms and accountants, who generally “in some way or another are regulated in their countries and are required to comply with anti-money laundering laws of money” . Those we call in our slang “professional client” [...]. We always have due diligence of these professional clients, who are our direct customers. They are resellers [companies], but in the end, meet their laws in each country. So the law in Panama, for example, Act 2 of 2012, allows you that when it comes to a regulated professional customer, can rest on that client [the intermediary] in what has to do with due diligence … A lot of work … SM: We have a wide portfolio of work and are 40 years of experience in this industry, where obviously we portfolios old societies and we have to start doing that job. For new it is easier, because it is something that begins to take effect from the date. However, it also places where you deal with their own laws [...] to protect the confidentiality, prevent you from sharing that information. This is the case, for example, Switzerland, which has very strict laws about that. If a client of his who have accounts in Panama, say, and Financial Analysis Unit (UAF) in Panama requested information from this client, which in turn, bought a company to his intermediary in Geneva, then how do for the information you are requesting the UAF Panama come from there, if they are not required to give that information SM: usually UAF will lead the two institutions. You will go to the bank to ask who is the beneficiary of that account and we will contact us to know who is the ultimate beneficiary. If we can not get the [...] information we have in our records the physical address of the intermediary and we have other data that the same UAF has indicated that it is information that suits you … in the specific case of the UAF [...] contact the broker and ask information … The structure, or the policy of working with professional customers is longstanding and it is because in some way or another, it served as a double check . They do their due diligence and we make it. And to feel supported, you know, or try to find a better insurance [sic] that you’re dealing with honorable people or reputable. What are the reasons that you are more present that prompted the resignation of their societies SM: the theme of PEP [person Políticametne Expuesta ] it is a sensitive issue, but it has to be clear that in all policies “know your customer” no tells you, because it is a PEP, you can not take your call. what you send all these policies is to make a ‘ enhanced diligence ‘, which is a [proper] “extended care” and are more and deeper the collections you request to meet that person. Including, depending on the law of the place, there are some who tell you that after two years of leaving office, PEP PEP longer. In others, they go up to five years. The fact that you have a PEP in your wallet is not a tricky issue for just the fact of being a PEP, it’s just that it is risky . And our risk matrix immediately detects it and do a enhanced diligence . [But] the issue of PEP is demonized … I can tell you the case of licensed [Jurgen] Mossack , [that ] it has been listed as PEP because he is an honorary member of Conarex , which is the Council on Foreign Relations . That is an honor that you will appoint a member of that council. They do not receive any fees, not even receive diet … Then do not comply with the concept of PEP. what moves the world, unfortunately, is the feeling of greed, no ambition. And societies are what people use to develop this The concept of PEP is one who, by reason of office, has access to the public treasury or has access to one or another form, to benefit because of their position … [or make] public relations … but in those cases, as I said, the image is demonized. But yes, where it sounds a PEP has a theme, we immediately renounce society … Now, following Law 23, am obliged to report back to the UAF ever which is detected, for example, a scandal of a PEP or otherwise. As one of my society, I make a ROS ( suspicious transaction report ), the FAU to enterarla and give the whole file and due diligence that I have [...]. Likewise, BVI [ British Virgin Islands , its acronym in English] we have to fill a SAR (Suspicious Activity Report), which are commanded to the regulator, the Financial Service Commission , and they, in turn, if they have good, I sent another questionnaire where I have to extend the information. That’s at the regulatory level and we have always done. What if that client is also a client in the trust or Assets Management? SM: it’s the same, and it’s even worse, because those people, those entities themselves are supervised old data, and are licensed by entities that have a lot of time walking, and even they are audited. Whenever the audits the Superintendency of Banks and the Securities [these institutions] verify that, indeed, have all updates due diligence … for example, they set deadlines: every six months you have to make runs, for example, customers who are high risk [high risk] or every year when they are not so high risk . They, when they come to investigate and inspect, verify that records the evidence of what is done is JR. In the cases where we have no risk indicator, [runs due diligence] are done every 3 years. That is a policy … If you find something different to change what was reported a year ago [...] is also reported … Here in Panama, how long after leaving office is considered a person PEP SM: I think here in Panama is not regulated. I think we [...] consider two years, two and a half years JR. Internally, we take care standards FATF [Financial Action Task Force], which are 5 years . We use the same standards in general terms. On the issue of due diligence, especially with people who come to work with you for the first time, to them you have a manual JR: Yes, manuals complimiento in each jurisdiction SM. Here everything is process and procedures to be followed [...]. I believe that we are within everything, pioneers in the field of due diligence … In the interview then joined one of the partners and founders of the firm, Ramón Fonseca Mora ., partner Jurgen Mossack, the other founding attorney of the firm Ramón Fonseca Mora (RFM): We are fully willing to be open and transparent with you. We have never been sued or have been formally accused of anything … I asked them to tell me how many companies have done in 40 years … and are more than 240 thousand. Not all are alive, most are dead, but that gives an idea of the industry … These vehicles mainly sell them to intermediaries, such as banks, lawyers, fiduciaries, accounting. 90% of our clientele is professional and in turn resell [companies] to their final customers who sometimes get into trouble. Unfortunately, that happens. The world is not perfect and we do not have a magic wand to know who gets into trouble and who is not. Some seem to get into trouble, but it is not, as the case Lava Jato in Brazil [...]. Sell a society is now so dangerous almost like selling uranium. We have a department of due diligence increasingly large, increasingly focused search more on who the end customer, based on the new laws to comply. I think we are the only ones who most fulfilled that, modesty aside. And always trying really get to the bottom of things. Ever the firm or group company has asked not to do the ‘due diligence’? RFM: not to my knowledge, unless they have direct contact with the department of due diligence , which say that is not done. What happens when a person becomes a PEP, which has previously been a customer of you and in the course of the relationship PEP becomes RFM: I could not be a customer of Mossack Fonseca. Ha ha … Being PEP is not sin. They explained to be expanded further due diligence. RFM: Yes, we do much more exhausted, and we gave instructions not to accept [as clients]. But it is a risk … A person in public office is a risk, because that’s where they come mismanagement. We made the decision a couple of months and not to accept PEP and entirely ago. [Now] is [...] standard signature There have been people who have approached us after publishing a story and tell us. ‘I have closed all . accounts’ SM: local banks we’ve worked for all these years are our business partners. The banks know us and know that there are reputable people behind the firm, but the subject are our correspondents. The correspondent does not need to know and do not ask what is the genesis of your relationship … What if one of their representative offices or one of its customers violate intermediaries firm policies? Do you what do RFM: It’s happened. For example [...] there are franchises that do not want to follow [the firm policies] and we have sent people to do regular audits. And several offices are cutting them, because they do not fully comply with our policies, mainly due diligence [...] From Law 23, we are taking drastic measures that do not comply. SM: to us not weigh our hands to end a relationship. We do not want bad customers … We want our portfolio is as healthy as possible. When you talk about your relationship with the bank, do you offer nominee directors to open bank accounts SM: nominal call them is a term that should not be, because nominal figurehead sounds. The first difference to make is that the director of a company is not the owner of a company. The director of what is supposedly in charge of the administration of society. What we provide … we are secretarial services and that has many purposes. For example, that facilitates you can enter documents to the Public Registry [...]. People who act as directors usually give powers of administration to the real owners societies [...]. Yes, today banks open accounts with nominal directors day, but always know who is the real owner of societies RFM. This is also a service copied England. If you enter the site of many English companies of lawyers, fiduciaries, all offer secretarial service, including what they call the directors, ie directors. Before, law firms opened accounts for their customers and there are lawyers firms have signed on these accounts. Is it not the case here or yes SM: I want to correct something in your question. We do not aperturamos accounts for customers, we present the customer to the bank [...]. And it is clear that the bank’s customer, for all purposes, is the customer of ours. We [...] are enemies to give a certification where we say we put the hand in the fire for that client. Yes we do everything on your due diligence, but the bank has the responsibility to do … It is also common practice that trusts [...] have bank accounts and there if there is a department . financier who is recognized and has the ability to receive instructions from their clients and bank movements, all under strict fiduciary duty that is very serious and regulated in Panama RFM: also the bank, which is the most important, know who the end customer and, even if someone is signing in the account, knows that the account owner is equis person who is not a signatory. So is regular use SM: Yes, absolutely, because that is called trust management [...] . We, when we provide these services, we do so with a purely fiduciary, and that is a type of trust that exists in Panama, the management trust, which is when are investment funds. in the same vein, do they work the same with the brokerages SM: We do not have home values <. / p> But investment accounts, also working with brokerages? SM: They usually do not work with brokerage houses. What we have is an investment adviser, which is very different from the brokerages. Their actions, their responsibilities are quite limited. They receive not raise funds. Simply they offer the umbrella of investment opportunities from different banks and financial institutions, but we usually have no direct relationship with house values [...]. We have, within due diligence policies, which are high risk activities such as the case of casinos and what it has to do with online businesses and houses of values for us is a touchy subject. it is not what I asked. That is, if the same service offered by banks, offer them through brokerages SM: We handle accounts with brokerage houses. investment Accounts SM. No … If there is a case out there the truth is not that I know them all, but I can say that this is not the generality RFM. not the generality, but it could be a case that suddenly we’ve helped someone. We do not work with houses of local values. In Panama is a hotly debated topic, but what happens if you discover that a client, through an intermediary or a direct client of his company uses its assets to the treasury to hide in your country? What happens in these cases SM: There have to make a very big difference and sometimes people tend to make the mistake of using this figure as synonymous and non they are. There is something known as avoidance and evasion [...], which are totally different. Avoidance is perfectly legal. When you make use of the benefits it gives you a treaty to avoid double taxation. That’s when you find the way that the law itself allows you to fiscally optimize your heritage. [We want to] make it clear that not advise clients [...]. Our business is to serve people who come with a specific need, but have received advice in their country and the reason for that is that we are all practicing lawyers in Panama … If it is a customer who wants to make use of double taxation treaties, where we do have tried to be scholars, because Panama has a lot of signed treaties for purposes of being able to take advantage of what we have done as a country and power help customers, yes, sometimes we use Panama within a structure that the client bring [...], but not for evasion. We [...] not we sponsor, even we incentivize the commission of a crime of this nature, especially when tax evasion is typified in the crime of money laundering and is a very serious charge and is an area where we try not to enter. RFM: However, I repeat, we sell 90% of our societies to intermediaries. The broker suddenly puts itself with a person who is using them for those purposes, but we are not aware. Moreover, I have understood that we have a contract with the customer which tells us that it has complied with the laws of their country, because we are not lawyers in the United States, Holland, nothing. we are Panamanian lawyers and we can not get us to see the structures of society or the activities being undertaken by the company against the tax system [...]. Remember, our client is usually a broker, so we have no access to the end customer to sign this, but we have already begun to demand it SM:. Obviously, if a customer arrives and he says, “I need a Panamanian corporation, I do my due diligence,” and asked, “what are you going to spend the Panamanian society?” and says, “export of flowers”. If that society [...] is placed in such a structure, where export occurs or not or expenses are invented or made [...] some sort of tax evasion … what can we do? So, we are not policemen to be behind the activities that make societies. We try to go where we were reasonably possible [...] RFM. How many people have in due diligence ? Every time I sign more contracts SM:.. 30 people, and going up RFM: And now we have a big problem … we to do due diligence back. If we sold a company in 1990 and is active [...] now we have to call to see who is the owner of the company since 1990 … That money is enough. But, hey, let’s be honest: Panamanian corporations, international companies have been misused by some people. Sometimes up to us and sometimes competition … And yes, definitely here had to do this But we must take into account the following:. The biggest seller of corporations is England. They sell 250,000 companies a year in Panama sell 20 000, of a sort, and the United States, which buys companies and resell [...]. They also sold as 250,000 companies a year … The biggest tax haven in the world is called the United States. They do not want competition, they are, in my personal opinion, this thing to eliminate their competition, because they need the Argentine put their money outside in New York and not in Panama. that money [is that] we have in Panama deposited in banks [...]. The pendulum was here, [was] Total debauchery. But now the pendulum has gone over, and I think we should return back to its right balance, where Panama continue this open economy that both benefits us, that attracts people. The our system is not completely corrupt. It does have elements to debug, but we must also protect it. Our industry itself is abused, Panamanian companies appearing everywhere, ours are everywhere, are of the greatest [...]. We’re not perfect, we are passes a fish, sometimes a shark passes and sometimes I fear. Who is behind this company? But it is not our intention not do it on purpose. The traffickers, money launderers have their money in London, New York and Miami … I can open an account tomorrow New York [only] with my driver’s license, virtually [...]. The Argentine is in Panama and has its money on deposit and start asking many questions, takes their money to New York and we lose that money. Now, if the Argentine is a swindler, who is going to New York … The corporation is the vehicle’s commercial and business world. It is the vehicle of what I call greed [...]. What moves the world, unfortunately, is the feeling of greed, no ambition. And societies are what people use to develop this. There are millions of corporations in the world and are needed to facilitate trade transactions and Panama is a popular place, we have made it popular with hard work, worked hard [...]. the lawyer Mossack and I went to travel the world because customers did not want to buy Panamanian corporations. We found the British Virgin Islands and were the first to put an office there. The following year came [the Morgan & amp signature;]. Morgan, and began to market Virgin Islands It was not a matter of saving Panama because the buffalo were gone and we as Indians had to be behind them, they were customers. The buffalo were grazing and we [...] we took them to graze a safe place, the British Virgin Islands. That never Panama has recovered … We sell a lot more companies in the BVI in Panama. We tried to rescue Panama, but it is becoming more difficult as there are so many people want another variety, so we are now in Nevada, in England, do companies established in Hong Kong, which the customer needs SM. that’s important. We do not only societies in places misnamed-it is a subject very debatido- territories offshore . We are already in territories of New Zealand, where taxes are paid So, the issue is simply do what I tell them. Use of double taxation treaties as the law allows, and move to places [...] that they meet international standards of transparency. 
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