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


US lawmakers intend to respond to Pandora’s Papers with outstanding legislation targeting professional assistants who transfer dirty money to corrupt clients.

The bipartisan measure will require a wide range of intermediaries, including lawyers, accountants, real estate specialists, trust managers, art dealers, financial advisors and public relations specialists, to ensure that they do not launder black market profits.

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

Called the Opportunity Act, this ambitious law is inspired by an investigation of the secret deals and hidden assets of more than 330 politicians in over 90 countries led by the International Consortium of Investigative Journalists.

The bipartisan measure, which is expected to be made public on Friday, could require intermediaries not only to verify the data on money flowing into their business, but also to report suspicious funds and any other suspicious activity to regulators and employees. law enforcement.

Anti-corruption experts said the law, which has been in the works for at least two years, makes sense now because the leaked revelations released by ICIJ and its media partners since Sunday reveal many of the professions that the Opportunity Law now seeks to regulate.

“The ICIJ and other investigative journalists have created a political window for this important national security measure,” said Paul Massaro, Congressional anti-corruption adviser. “Global corruption is a real threat to democracy.”

“The Pandora Papers opened a historic moment for a radical political response,” added Josh Rudolph, a fellow at the German Marshall Fund’s Alliance for Democracy against Unfair Finance.

The Pandora Papers is the largest offshore finance investigation, detailing a multitude of professions. Proponents of the bill are especially targeting lawyers, who they say have not received due diligence for a long time.

Rudolph and Massaro cited several case studies from the Pandora Papers to persuade lawmakers to pass the Opportunity Act. They include:

US TAX INSTRUMENT: The Pandora Papers discovered that the agents have set up about 30 US trusts in South Dakota associated with people or companies accused of fraud, bribery, or human rights abuses in some of the world’s most vulnerable communities.

BIG LAW: The Pandora Papers study found Baker McKenzie, the largest law firm in the United States, is the architect and backbone of the offshore shadow economy. The firm did work for a US-sanctioned Russian arms dealer, as well as Ukrainian oligarch Igor Kolomoisky and fugitive Malaysian financier Joe Lowe, accused of helping organize two of the world’s largest alleged frauds. Baker McKenzie, who lobbies for big banks and big technology, also opposed proposals aimed at strengthening oversight of financial regulation and tax law.

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ROYAL EMPIRE REAL ESTATE: The Pandora documents showed how the world’s wealthiest and most politically connected use shell companies to avoid scrutiny in international real estate transactions. Real estate specialists helped Jordan’s King Abdullah II buy luxury homes in London, Washington DC, and Malibu through offshore companies. The deals, totaling $ 106 million, raise questions about whether real estate agents helped a foreign ruler, illicitly obtained wealth, take him out of his country.

RUSSIAN SWEET DEAL: The ICIJ also showed how the middlemen helped Putin’s leading image-maker Konstantin Ernst secure a secret stake in a billion-dollar real estate deal using offshore companies.

HUNT FOR DEVELOPED TREASURES: Pandora’s documents revealed that shortly after American investigators tied infamous art dealer Douglas Latchford with stolen Cambodian treasures, Latchford and his family set up offshore trusts containing many 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 reconcile the United States with most other countries, which already require professional intermediaries to follow anti-money laundering protocols in order to detect and prevent criminals from disguising illegal funds as legitimate income.

“Our laws require banks to report suspicious financial activity, but not other sources of money laundering such as law firms and art dealers,” Rep. Malinowski wrote on Twitter. “This is a loophole through which kleptocrats can sail on a yacht, so I am submitting a bipartisan law to close it.”

More rainfall around the world

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

Members of the European Parliament discussed the revelations of the Pandora documents during today’s meeting with many lawmakers calling for reforms to stop tax evasion and other financial crimes promoted by shell companies and trusts in tax havens.

“How can Europe ask its citizens to make sacrifices when two [European] are the country’s leaders and one finance minister avoiding taxes? ”Said Rosa D’Amato, MEP from Italy. “This is not only a tax fairness issue, it is also a social justice issue.”

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

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

In Sri Lanka, President Gotabay Rajapaksa today instructed the Bribery or Corruption Allegations Commission to investigate the Sri Lankan individuals named in the Pandora Papers, local media reported.

At the same time, Tirukumar Nadesan, the husband of former minister Nirupama Rajapaksa, whose offshore deals were uncovered by the ICIJ’s investigation, has called for an independent investigation of the report, according to Sri Lankan press reports.

In a letter addressed to the President, Nadesan expressed his preference for a retired judge to investigate and stated that “my wife and I are completely innocent and not guilty of any wrongdoing.”

The ICIJ reported that Bernard de Lagisch and other family members of the founders of the chemical giant Solvay have moved millions overseas, while people living near Solvay’s factories in Northern Italy and New Jersey have accused the company of contaminating water supplies. In Belgium, ICIJ partners Le Soir and De Tijd announced that Bernard de Lagish resigned from Solvay’s board on September 24 and from Solvac’s managing director on September 27 after answering ICIJ questions. De Lagish told De Tiid that the resignation was “strictly for personal reasons.”

Former Hong Kong executive director Leung Chung-ying denounced ICIJ Stand News partner for his Facebook page, claiming that the investigation into his offshore deals has “ulterior motives.” Stand News and ICIJ discovered that in 2015, while the main leader of Hong Kong, Leung secretly transferred over $ 300,000 worth of shares he owned in a subsidiary of a real estate firm. Lyng, who did not respond to repeated requests from ICIJ for comment, denied wrongdoing on Wednesday and said he was not required to disclose details of his ownership and deal at the time.

Bulgaria’s Anti-Corruption Commission announced that it has begun analyzing wealth declarations filed by former MP Delyan Slavchev Peevski. On Tuesday, ICIJ’s media partner in Bulgaria, BIRD, published an article revealing that Peevski was associated with offshore companies not listed in the declarations that Bulgarian politicians are required to file.

The Bulgarian State National Security Agency (SANS) also said that Peevski came under scrutiny in June when the US authorities imposed sanctions on him for “involvement in serious corruption,” and new evidence from the Pandora Papers will now be examined. On Wednesday, Peevski was questioned by the SANS agency.

Pakistani Water Minister Munis Ilahi denied having any offshore or undeclared assets following ICIJ’s announcement that Ilahi had pulled out of investment in Singapore after being told Pakistan’s tax authorities would be informed. The investigation revealed that Elahi told offshore provider Asiaciti that he owns a significant stake in RYK Mills, a sugar mill in the Punjab province. Between 2017 and 2018, his wife owned a $ 8.2 million London apartment through a UK-registered company. None of the assets figure in the asset declaration that Ilahi and his wife submitted to the Pakistani National Assembly in 2017.



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