El Salvador branch of �Panama Papers� law firm raided
AFP
Police on Friday raided the El Salvador offices of the Panama-based law firm at the heart of the Panama Papers scandal that has revealed how the wealthy in many countries stashed their wealth offshore, reports AFP from San Salvador. The raid on the San Salvador offices of the firm, Mossack Fonseca, netted a good amount of computer equipment, El Salvadors state prosecutors office said on its Twitter account. Authorities in El Salvador on Wednesday had announced they had launched a probe to see if the Salvadorans identified in the Panama Papers reports had broken any law. Reports said some 33 Salvadorans were named. The state prosecutor, Douglas Melendez, visited the law firms premises on Friday. He said he would soon talk to reporters about the raid. Mossack Fonsecas employees had left the branch office a day earlier, on Thursday. The manager said it was because they were moving offices, the prosecutors office said.
According to El Faro, an online newspaper, the offshore companies used by Mossack Fonsecas Salvadoran clients were used for transactions of hundreds of thousands of dollars, including buying property in El Salvador, all under the radar of local authorities.
Meanwhile, Frances decision to put Panama back on its list of tax havens in the wake of the Panama Papers revelations is wrong, Panamanian President Juan Carlos Varela said on Friday. I want to be very clear that the decision taken by Frances government is a wrong and unnecessary step, even more so given the communication between both heads of state and the fact the world needs multilateral cooperation from all countries to tackle global problems, he told reporters.
He added that his finance minister, Dulcidio de la Guardia, would travel to Paris on Tuesday to stress that Panama was a country that was dignified, respectful and open to dialogue, as well as one committed to greater transparency. Frances finance minister, Michel Sapin, had said his government would put Panama back on its list of uncooperative countries in terms of sharing tax information. France removed Panama from the list of Uncooperative States and Territories (ETNC) in 2012 after the two countries reached a bilateral accord on fighting tax evasion. A new ETNC designation means France would view all transactions with Panama with suspicion, presuming tax fraud unless there is evidence to the contrary. France also urged the Organization for Economic Cooperation and Development to follow suit.
Panamas government immediately reacted by warning it could take retaliatory measures against France, including blocking French investment and withholding public tenders.
Asked about retaliating against France, Varela said he did not want to talk about that right now, that dialogue was the priority. Varela this week has emphasized his readiness to improve information-sharing with France, and announced the creation of a commission to boost business transparency in his Central American country.
He and other officials also stress that they have implemented a series of reforms to curb the anonymity afforded companies incorporated in Panama. Panama figured on a list of 30 tax havens last June, when the European Commission unveiled its plan to combat tax evasion by multinationals. But in February, the inter-governmental Financial Action Task Force (FATF) removed Panama from its gray list of countries found lacking in the fight against money laundering and terrorism financing.
Being put back on that list, or on Frances list of ETNCs, would deal a blow to Panamas financial services sector, which accounts for seven percent of gross domestic product. The revelations in the Panama Papers, resulting from what the Panamanian law firm Mossack Fonseca blamed on a computer hack launched from abroad, revealed how the worlds wealthy stashed assets in offshore companies.
